The Bank of Japan also known as Nippon Ginko, is the central bank of Japan. The
Bank is often called Nichigin for short. It has its headquarters in Chuo, Tokyo.
History Like most modern Japanese institutions,
the Bank of Japan was founded after the Meiji Restoration. Prior to the
Restoration, Japan's feudal fiefs all issued their own money, hansatsu, in an
array of incompatible denominations, but the New Currency Act of Meiji 4 did away
with these and established the yen as the new decimal currency, which had
parity with the Mexican silver dollar. The former han became prefectures and
their mints became private chartered banks which, however, initially retained
the right to print money. For a time both the central government and these
so-called "national" banks issued money. A period of unanticipated consequences
was ended when the Bank of Japan was founded in Meiji 15 after a Belgian
model. It has since been partly privately owned. A number of
modifications based on other national banks were encompassed within the
regulations under which the bank was founded. The institution was given a
monopoly on controlling the money supply in 1884, but it would be another 20
years before the previously issued notes were retired.
Following the passage of the Convertible Bank Note Regulations, the Bank of Japan
issued its first banknotes in 1885. Despite some small glitches—for example,
it turned out that the konnyaku powder mixed in the paper to prevent
counterfeiting made the bills a delicacy for rats—the run was largely successful.
In 1897 Japan joined the gold standard and in 1899 the former "national"
banknotes were formally phased out. Since its Meiji era beginnings, the Bank
of Japan has operated continuously from main offices in Tokyo and Osaka.
= Reorganization= The Bank of Japan was reorganized in
1942 under the Bank of Japan Act of 1942. There was a brief post-war period
during the Occupation of Japan when the bank's functions were suspended, and
military currency was issued. In 1949, the bank was again restructured.
In the 1970s, the Bank's operating environment evolved along with the
transition from a fixed foreign currency exchange rate and a rather closed
economy to a large open economy with a variable exchange rate.
During the entire post-war era, until at least 1991, the Bank of Japan's monetary
policy has primarily been conducted via its 'window guidance', whereby the
central bank would impose bank credit growth quotas on the commercial banks.
The tool was instrumental in the creation of the 'bubble economy' of the
1980s. It was implemented by the Bank of Japan's then 'Business Department'.
A major 1997 revision of the Bank of Japan Act was designed to give it
greater independence; however, the Bank of Japan has been criticized for already
possessing excessive independence and lacking in accountability before this
law was promulgated. A certain degree of dependence might be said to be enshrined
in the new Law, article 4 of which states:
In recognition of the fact that currency and monetary control is a component of
overall economic policy, the Bank of Japan shall always maintain close
contact with the government and exchange views sufficiently, so that its currency
and monetary control and the basic stance of the government's economic
policy shall be mutually harmonious. However, since the introduction of the
new law, the Bank of Japan has persistently rebuffed government
requests to stimulate the economy. Following the election of Prime Minister
Shinzō Abe, the Bank of Japan has, with Abe's urging, taken proactive steps to
curb deflation in Japan. On October 30, 2012, The Bank of Japan announced that
it has undertaken further monetary-easing action for the second
time in a month. Under the leadership of new Governor Haruhiko Kuroda, the Bank
of Japan released a statement on April 5, 2013 announcing that it would be
purchasing securities and bonds at a rate of 60-70 trillion yen a year in an
attempt to double Japan's money base in two years.
Mission According to its charter, the missions
of the Bank of Japan are Issuance and management of banknotes
Implementation of monetary policy Providing settlement services and
ensuring the stability of the financial system
Treasury and government securities-related operations
International activities Compilation of data, economic analyses
and research activities Location
The Bank of Japan is headquartered in Nihonbashi, Tokyo, on the site of a
former gold mint and, not coincidentally, near the famous Ginza
district, whose name means "silver mint". The Neo-baroque Bank of Japan
building in Tokyo was designed by Tatsuno Kingo in 1896.
The Osaka branch in Nakanoshima is sometimes considered as the structure
which effectively symbolizes the bank as an institution.
Governors The chief of the bank has considerable
influence on the economic policy of the Japanese government. Japanese lawmakers
endorsed the acting Bank of Japan chief as its governor Haruhiko Kuroda. He is
seen to adopt Reflation policy as part of Abenomics.
= List of governors= = Monetary Policy Board=
As of October 2014, the board responsible for setting monetary policy
consisted of the following 9 members: Haruhiko Kuroda, Governor of the BOJ
Kikuo Iwata, Deputy Governor of the BOJ Hiroshi Nakaso, Deputy Governor of the
BOJ Ryuzo Miyao
Yoshihisa Morimoto Sayuri Shirai
Koji Ishida Takehiro Sato
Takahide Kiuchi ]]
See also Bank of England
Economy of Japan European Central Bank
Federal Reserve Reserve Bank of India
Japanese yen Notes
References External links
Official website Building a national currency
Japan and World Interest Rates, Interest Rates data and chart daily updated by
ForexMotion