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This risk should not be overstated, however, since the average residual maturity of the BoJ’s bond portfolio is only around 2–3 years.
The monetary base is defined as the sum of current accounts and bank notes and coins in circulation.
The BoJ may not need to sell large amounts of long-term government bonds to reverse quantitative easing, however, since it also has significant holdings of short-term paper, as well as temporary liquidity-providing operations that could be allowed to lapse.
The large interest rate increase in the United States in the 1980s caused some banking problems, but those interest rate hikes came at a time of economic contraction.