This policy aims at creating an economic situation where prices increase at around 2 percent on average, as is the case with the United States and Europe, by raising people’s medium- to long-term inflation expectations to around 2 percent and re-anchoring these expectations at that level.
The mechanism of QQE is expected to be as follows: first, inflation expectations will be raised through a clear commitment and through a large-scale monetary easing to underpin the commitment; second, concurrently, downward pressure will be put on nominal interest rates through massive purchases of government bonds, thereby decreasing real interest rates and stimulating private demand such as business fixed investment.