The Bank of Japan was an innovator in terms of "unconventional" monetary policy. At the end of the 1990s, the BOJ introduced zero interest rate policy and quantitative easing (QE) policy long before other central banks.
But in response to the 2007-08 financial crisis, central bankers around the world have been playing "follow the leader" when it comes to monetary policy. For its part, the U.S. Federal Reserve has been suppressing interest rates ever closer to, and below, zero.
Monetary policy is partly guided by a belief that lowering the cost of borrowing and the returns on bonds will lead to higher bond and share prices. The resulting capital gains is supposed to spark a "wealth effect" that along with lower interest rates on commercial and consumer loans stimulate investment and consumption. In turn, rising aggregate demand will supposedly bring job creation and higher profits.
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