Bank of Japan decides to introduce quantitative easing

Conditions at the time

Recovery had stalled, and downward pressure on prices from weak demand was a concern.

How events unfolded

The current-account balance target was set at roughly 5 trillion yen, with the new procedures to be maintained subject to inflation conditions.

Stakeholders and impacts

The measure directly concerned banks’ central-bank accounts and short-term money markets.

Information available at the time

The policy target and conditions for maintaining it were public at the time, but whether it would succeed was not yet known.

Alternative interpretations and limitations

The 2001 framework and subsequent QQE are not treated as the same policy. The announcement itself is not evidence of realized effects on growth and inflation.

Interpretation using later sources

The Bank of Japan’s 2006 decision replaced the current-account-balance operating target introduced in 2001 with an overnight-rate target, judging its inflation commitment fulfilled. However, it kept the overnight rate effectively at zero and continued long-term government bond purchases for the time being. Ending the balance target therefore did not end every easing tool simultaneously; the Bank’s assessment alone cannot attribute all improvements in activity and prices to quantitative easing.

Evidence coverage through 2006-03-09 · Sources checked 2026-10-14

• Change in the Guideline for Money Market Operations ↗

Related events and periods1

• Global economic integration, IT investment, and recurring financial crises →

  An event or period whose recorded start falls within this editorial interval. This does not establish that it caused or represents the characteristics of the era, nor guarantee that the entire period falls within the interval.