Therefore, the Bank considered it necessary to take a step significantly different from the previous policies by working directly on people’s expectations to dispel deflationary expectations – to shift the Phillips curve upward. Given that the continuation of deflation in itself makes overcoming of deflation even more difficult, the Bank judged it necessary to implement its new initiatives as soon as possible.
This led to the introduction of the QQE (Chart 9). A strong and clear commitment as well as a new phase of monetary easing both in terms of quantity and quality The QQE comprises two features aimed at drastically changing people’s expectations at the earliest possible time.