Ugai (2006)7 summarizes existing empirical analyses of the QE policy related to the first stage by focusing on the aforementioned three features of that policy: (a) the effect of expanding the size of the Bank’s balance sheet (or the monetary base) by increasing the current account balance at the Bank; (b) the effect of the forward guidance policy on the expected future path of short-term interest rates; and (c) the effect of altering the composition of the Bank’s balance sheet by increasing the purchases of JGBs (Chart 4).
To summarize the research results, the effect of the QE policy was traced mainly through the forward guidance policy by pushing the yield curve downward (namely, through the signaling effect). The portfolio rebalance effect meanwhile had mixed results, depending on the types of assets. In particular, the purchase of JGBs had little impact on lowering risk premiums.