3. Structure of Quantitative and Qualitative Monetary Easing and Joint Statement with Government

A series of quantitative and qualitative monetary easing consists of interest rate control and inflation expectations. In the former, the Bank of Japan has gained the knowledge that the yield curve can be controlled by operations. As to the latter, it is recognized that inflation expectations must work for the quantitative and qualitative monetary easing (QQE) mechanism to be established. On the other hand, the government has set a goal of restoring fiscal soundness. Then, what is the relationship between monetary policy and fiscal policy? The economic policy of Japan has been governed by the Joint Statement of the Government and the Bank of Japan released in January 2013. Under this framework the Bank of Japan is responsible for achieving price stability of 2 percent, and the Government is responsible for sustainable economic growth with the aim of restoring fiscal consolidation. The characteristic of this statement is that each of them is independently responsible for the realization of the matters under their jurisdiction.