Quantitative and Qualitative Monetary Easing (QQE) with a Negative Interest Rate is a policy that the Policy Board of the Bank of Japan decided to introduce at the Monetary Policy Meeting held on January 28 and 29, 2016. In order to achieve the price stability target of 2 percent in terms of the year-on-year rate of change in the consumer price index (CPI) at the earliest possible time, the Bank pursues monetary easing by making full use of possible measures in terms of three dimensions: quantity, quality, and the interest rate. The specific measures are as follows.

1. Interest-Rate Dimension: Application of a Negative Interest Rate to Current Account Deposits at the Bank

The Bank applies a negative interest rate of minus 0.1 percent to part of financial institutions' current account deposits at the Bank.

2. Quantity Dimension: Guideline for Money Market Operations

With a view to pursuing quantitative monetary easing, the main operating target for money market operations was changed from the uncollateralized overnight call rate to the monetary base in April 2013. Currently, the Bank conducts money market operations so that the monetary base will increase at an annual pace of about 80 trillion yen.

3. Quality Dimension: Guidelines for Asset Purchases

a. With a view to encouraging a decline in interest rates across the entire yield curve, the Bank purchases Japanese government bonds (JGBs) so that their amount outstanding will increase at an annual pace of about 80 trillion yen.

b. With a view to lowering risk premia of asset prices, the Bank purchases exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) so that their amounts outstanding will increase at annual paces of about 6 trillion yen and about 90 billion yen, respectively.

c. As for CP and corporate bonds, the Bank maintains their amounts outstanding at about 2.2 trillion yen and about 3.2 trillion yen, respectively.

4. The Bank's Monetary Policy Stance: Continuation of QQE with a Negative Interest Rate

The Bank will continue with QQE with a Negative Interest Rate, aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining this target in a stable manner. It will examine risks to economic activity and prices, and take additional easing measures in terms of three dimensions -- quantity, quality, and the interest rate -- if it is judged necessary for achieving the price stability target.

For more details, see Introduction of "Quantitative and Qualitative Monetary Easing with a Negative Interest Rate" as well as its reference, Key Points of Today's Policy Decisions, both released on January 29, 2016, and Statement on Monetary Policy, released on March 15, 2016.

Related Information

• "Price Stability Target" of 2 Percent and "Quantitative and Qualitative Monetary Easing with a Negative Interest Rate"
• Introduction of the "Quantitative and Qualitative Monetary Easing" (April 4, 2013)
• Expansion of the Quantitative and Qualitative Monetary Easing (October 31, 2014)
• Statement on Monetary Policy (Introduction of Supplementary Measures for Quantitative and Qualitative Monetary Easing) (December 18, 2015)
• Enhancement of Monetary Easing (July 29, 2016)