Bank of Japan's long battle with deflation and the great unwinding

Tokyo: The Bank of Japan (BOJ) ended eight years of negative interest rates and other pieces of unorthodox policy on Tuesday, making a historic shift away from decades of massive monetary stimulus.

Here is a timeline of key moments in the BOJ's battle with decades-long deflation and the gradual unwinding of its radical monetary stimulus.

1999

February - BOJ introduces zero interest rate policy.

2000

August - BOJ raises short-term target to 0.25 per cent, a move criticised as premature as Japan suffers a domestic banking crisis.

2001

March - BOJ adopts quantitative easing (QE), shifts policy target from interest rates to pace of money printing.

2006

March - BOJ exits QE, shifts back to interest rate target.

July - BOJ raises short-term rates to 0.25 per cent.

2007

February - BOJ raises short-term rates to 0.5 per cent from 0.25 per cent.

2008

October - BOJ cuts short-term rates to 0.3 per cent from 0.5 per cent to fend off economic shocks from the collapse of Lehman Brothers.

December - BOJ cuts short-term rates to 0.1 per cent from 0.3 per cent.

2010

October - BOJ cuts short-term rates to 0-0.1 per cent, starts buying risky assets like exchange-traded funds (ETF) as part of a newly introduced asset-buying programme.

2013

January - BOJ adopts 2 per cent inflation target, signs agreement with government pledging to meet the target "at the earliest date possible."

April - BOJ Governor Haruhiko Kuroda adopts new asset-buying scheme dubbed "quantitative and qualitative easing" (QQE), commits to achieving 2 per cent inflation in roughly two years.

2014

October - BOJ expands QQE, increases purchases of government bonds, ETFs.

2016

January - BOJ adds negative interest rate policy, and applies a 0.1 per cent charge to a small pool of excess reserves financial institutions park with the central bank.

July - BOJ eases monetary policy, ramps up ETF buying.

September - BOJ adopts yield curve control (YCC), shifts policy target to interest rates from pace of money printing and introduces 10-year bond yield target of around 0 per cent.

2018

April - Kuroda re-appointed for a second term as governor.

July - BOJ clarifies it will allow the 10-year yield to move 10 basis points either side of its 0 per cent target.

2021

March - BOJ conducts "comprehensive assessment" of YCC to address its side-effects. It decides to taper ETF buying, widen the 10-year yield band to 25 basis points up and down the 0% target and adopts new market operation that allows it to buy an unlimited amount of 10-year bonds at a fixed rate.

2022

May - BOJ begins to offer buying unlimited amount of 10-year bonds at a fixed rate on a daily basis, as long-term interest rates approached its 0.25 per cent cap more frequently than before

December - BOJ widens 10-year yield band to 50 basis points up and down the 0 per cent target, a move aimed at easing some of the cost of prolonged stimulus.

2023

April - Kazuo Ueda becomes BOJ governor, removes guidance pledging to keep interest rates at "current levels or lower" and announces plans to conduct a comprehensive review of past monetary easing measures.

July - BOJ tweaks YCC by raising yield cap to 1 per cent from 0.5 per cent.

October - BOJ tweaks YCC by re-defining 1 per cent cap as a loose reference, a move seen as essentially dismantling yield control.

2024

March - BOJ dismantles massive stimulus programme by ending negative rate policy, YCC and risky asset purchases. Overnight call rate set as BOJ's new policy target.