Market Operations in Fiscal 2017
July 6, 2018
Financial Markets Department
Bank of Japan
Introduction
During fiscal 2017 (April 1, 2017 to March 31, 2018), the Bank of Japan pursued powerful monetary easing under Quantitative and Qualitative monetary easing (QQE) with Yield Curve Control. Under yield curve control, the Bank applied a negative interest rate of minus 0.1 percent to the policy-rate balances in current accounts held by financial institutions at the Bank as the short-term policy interest rate. Regarding the long-term interest rate, the Bank purchased Japanese government bonds (JGBs) so that 10-year JGB yields would remain at around 0 percent. Aside from JGBs, the Bank purchased a wide range of assets, including exchange-traded funds (ETFs), Japan real estate investment trusts (J-REITs), CP, and corporate bonds.
This paper explains market operations conducted under QQE with Yield Curve Control. First, it outlines the guideline for market operations and the conduct of market operations by the Bank, followed by an overview of developments in domestic money and bond markets under the conduct of these market operations. Second, it describes the conduct of each measure in market operations and discusses changes in the frameworks related to market operations. Finally, the paper presents the Bank's actions to enhance dialogue with market participants.
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Financial Markets Department, Bank of Japan
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Market Operations Division, Financial Markets Department
E-mail : post.fmd7@boj.or.jp