The Bank of Japan's massive stimulus programme lowered real interest rates by slightly less than 1 percentage point, the central bank said on Friday, a day after it rolled back the timeframe for hitting its inflation target. It was the first time the bank publicised an analysis on the effects of quantitative and qualitative easing, a sign it was moving to counter mounting criticism that the programme has failed to spur inflation and get the economy out of low gear. "The actual improvement in economic activity and prices was mostly in line with the mechanism anticipated by [the programme]," the bank said in a research paper. When the bank launched its stimulus programme in April 2013, it pledged to achieve 2 per cent inflation in two years by flooding markets with cash through aggressive asset purchases. After exceeding 1 per cent last year, however, core consumer inflation has ground to a halt on falling oil costs and weak spending, forcing the bank to push back on Thursday the timing for hitting its 2 per cent inflation target. In the paper, the central bank said the most important transmission channel was to lower real interest rates so that consumers and companies would boost spending rather than sit on cash. That channel seems to be working with the stimulus programme having lowered real interest rates by slightly less than a percentage point, according to the analysis that covered the past two years. During the period, Japan's output gap improved by two points and annual consumer inflation rose one point, roughly in line with the estimated effects of the stimulus, the paper said. Nominal household income expanded by six trillion yen and corporate profits by 12 trillion yen, although the boost to real gross domestic product was small because of the hit from last year's sales tax rise.