An explanation of how the Bank of Japan's large-scale monetary easing worked and the circumstances that led to the introduction of exceptional policies, including negative interest rates. It also touches on the backdrop to the launch of the second Abe administration at the end of 2012.
The stated aim of large-scale monetary easing is to keep interest rates low by increasing the supply of funds to raise prices, thereby encouraging corporate investment and household consumption. The article explains the basic thinking behind the policy.
It introduces the inclusion of exceptional measures such as negative interest rates in large-scale monetary easing and first explains the key elements of the policy design. The article's structure sets out the policy's objectives and tools.
As background to the policy, it shows that the second Abe administration, launched at the end of 2012, positioned it as part of an economic policy aimed at overcoming deflation.