How does the Bank conduct outright purchases of Japanese government bonds (JGBs)?

The Bank conducts outright purchases of JGBs with coupons. Specifically, the Bank purchases them so that their amount outstanding will increase at an annual pace of about 80 trillion yen -- in line with the guidelines for asset purchases decided at the time of the introduction of Quantitative and Qualitative Monetary Easing (QQE) with a Negative Interest Rate in January 2016.

The Bank's purchases of JGBs are executed for the purpose of conducting monetary policy and not for financing fiscal deficits. The government -- in a joint statement released with the Bank in January 2013 -- stated that "in strengthening coordination between the government and the Bank of Japan, the government will steadily promote measures aimed at establishing a sustainable fiscal structure with a view to ensuring the credibility of fiscal management."

Related Page

For details of QQE with a Negative Interest Rate, see What is Quantitative and Qualitative Monetary Easing with a Negative Interest Rate?

Related Information

• New Procedures for Money Market Operations and Monetary Easing (March 19, 2001)