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To help explain what it all means, the Reuters graphics team has
produced an animated guide to the often bewildering world of QQE,
YYC and other tricks of the BOJ trade. (http://tmsnrt.rs/2igbqRk)
Deploying "quantitative and qualitative easing" (QQE) policies,
the BOJ has pumped a torrent of freshly minted yen into the
economy, largely by buying government bonds. The aim was to
stoke inflation and encourage spending.
When that failed to ignite economic activity, the central bank
early this year imposed a negative interest rate, charging banks
to park some of their overnight cash. It hoped this would
encourage lending.
This, too, didn't do the trick. So the central bank in September
pioneered "yield curve control" (YCC), an attempt to spur
lending by ensuring a gap between short-term interest rates
where banks borrow and long-term rates where they lend.
Whether the BOJ's latest steps will succeed, where years of
unorthodox policies haven't, remain a key question for 2017.
(Graphic by Simon Scarr, Jin Wu, Weiyi Cai; Additional graphic
text by Neil Fullick; Narration by Jeremy Wagstaff; Text writing
by William Mallard; Text editing by Bill Tarrant)
[© 2016 Thomson Reuters. All rights
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