The Bank's Conduct of Monetary Policy  Mechanism of "Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control" " QQE with Yield Curve Control" Yield curve control  Inflation-overshooting commitment Forward-looking expectations formation  Nominal interest rates  －  Inflation expectations  ＝  Real interest rates  Improvement in financial conditions Funding costs, financial and capital markets, etc.
Adaptive expectations formation  Exports, business fixed investment, private consumption, etc. Observed inflation rates  ＝  Inflation expectations  ＋  Improvement in output gap 10  Chart 11  II.