With all the Fed chatter, not much has been said about the communication from the Bank of Japan (BoJ) this week. Accompanying their meeting this week was a clear message that the future of monetary policy from Japan is changing. The BoJ is now going to turn their attention to interest rate targets. To do so, they are going to give less specifics on the bond purchases made and start lending directly to banks with terms up to 10 years. Amazingly, the target yield for the ten year maturity is zero. Even more amazingly, that implies an upward sloping yield curve since the short-term rates is at -0.10%. Meanwhile, the central bank’s stock purchase program remains unchanged. The term quantitative easing is “quantitative” because it targets a specific money supply. In basic economic theory, a central banker can control either the supply of money or the price (i.e. the interest rate) but not both at the same time. The BoJ is now saying that they are going to stop focusing on the supply and start focusing on the price. This is even more interesting because to do so they must influence the market via bond purchases or lending at undefined amounts. The BoJ already owns an estimated 30% of Japanese Government Bonds outstanding and it has been forecast by some for it to rise to 50% in the next two years. It seems that they are willing to take the monetary experiment to no end.