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Quantitative Easing in Japan

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Quantitative and Qualitative Monetary Easing (QQE)
Quantitative and Qualitative Easing was introduced on April 4, 2013 in order to achieve the price stability target of 2 percent based on the change in the consumer price index. The concept is similar to Quantitative Easing but instead focusing on both quantity and quality.

The current decision of BOJ to proceed a monetary easing
1)The adoption of the monetary base control The Bank of Japan changed its main operating target for money market operations from overnight uncollateralized call rate to the expansion of the monetary base via JGB purchases. The Bank of Japan will conduct money market operations which aims to increase the monetary base at an annual pace of about 80 trillion yen in 2014 and 2015 (an addition of about 10-20 trillion yen compared with the past). 2)An increase in JGB purchases and their maturity extension
The average remaining maturity of the bank’s JGB purchases extended more than double, so as to further encourage the decline in long term interest rate. Which the maturity of JGB extend from about less than 3 years to about 7-10 years. The Bank will purchase JGBs so that their amount of outstanding will increase at a pace 80 trillion yen (an addition of about 30 trillion yen compared with the past). 3)An increase in ETF and J-REIT purchases The exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) will be purchased at an annual pace of about 3 trillion yen and 90 billion yen respectively.
To sum up, the QQE process, QQE is a policy package announced by the BOJ in April of 2013 which aims to accelerate the pace of increase in the monetary base. QQE involves stepping up QE so that the monetary base will increase at an annual pace of about 80 trillion yen. QQE also

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