What is “Open market purchase”?

I think Japan central bank should has the most authoritativeness to explain this term.

Since 1989, Japan suffered a asset price bubble burst. The credit crunch attacked the whole economy system which caused a disaster to the banks/SME/Individual. After the stock market recession, no bank was willing lend and no one was willing borrow. (Everyone was saving money to prepare other default/writeoff.) All economy activities were totally collapsed in the second largest economy entity at that time.

The Japan central bank took the responsibility to act as only/final risk taker, by quadruple her balance sheet scale (both asset and liability side) . She repeated the following actions for nearly 20 Years:

1. Requested the Japan Treasury department issue bonds through auction and attract the banks in Jap to bid.

2. Increased her own balance sheet scale by:
a. At the liability side, create Yen (Currency) .
b. At the asset side, purchase the Government bond from the secondary market with premium/higher cost (from the domestic banks.)

The action equals to distribute the new Money to the M2 (increase the money supply to the economy system). Since the supply of money was getting huge, the interest rate was getting low. Her aims was to simulate the borrowing and economic activities.

The action 2. is called “Open market purchase”, which is the same as QE or printing money. The side effect of “Open market purchase” are

1. Introduce inflation as the money supply increase. (both M1/M2)
2. Increase the debt ratio for the central bank.

In fact, Bank of Japan is the forefather of QE and federal reserve/ECB are copying now.