What is the 'Bank Of Japan - BoJ'?

The Bank of Japan, (BOJ) is headquartered in Nihonbashi business district in Tokyo. The BOJ is the Japanese central bank, which is responsible for issuing and handling currency and treasury securities, implementing monetary policy, maintaining the stability of the Japanese financial system and providing settling and clearing services. Like most central banks, the BOJ also compiles and aggregates economic data and produces economic research and analysis.

BREAKING DOWN 'Bank Of Japan - BoJ'

The Bank of Japan issued its first currency notes in 1885 and, with the exception of a brief period following the Second World War, it has operated continuously ever since. The bank's headquarters in Nihonbashi are located on the site of a historic gold mint, which is located close to the city's Ginza, or "silver mint", district.

Organization of the Bank of Japan

The bank is headed by the governor, who was Haruhiko Kurodaank as of June 2018. Kurodaank was nominated in 2013, was the 31st governor of the BOJ, and was formerly the President of the Asian Development Bank. He was nominated for a new five-year term in February 2018. Kuroda is an advocate of looser monetary policy.

There are also two deputy governors and six executive directors heading the BOJ. The governor, deputy governors and executive directors belong to the bank's Policy Board, which is the Bank's decision-making body. The Board sets currency and monetary controls, the basic principles for the Bank's operations, and oversees the duties of the Bank's officers, excluding auditors and counselors. The Policy Board includes the governor and the deputy governors, auditors, executive directors and counselors.

Monetary Policy

The Bank of Japan decides and implements monetary policy to maintain price stability. The Bank manipulates interest rates for the purpose of currency and monetary control using operational instruments, such as money market operations. Monetary policy is decided by the Policy Board at Monetary Policy Meetings (MPMs). At MPMs, the Policy Board discusses the nation's economic and financial situation, sets the guidelines for money market operations and the Bank's monetary policy stance for the immediate future.

MPMs are held eight times a year for two days. Monetary policy decisions are made by a majority vote of the nine members of the Policy Board, which consists of the Governor, the two Deputy Governors, and the six other members. The bank uses in-depth research and analysis on economic and financial conditions when deciding monetary policy.

Independence and Transparency

The BOJ immediately releases its decisions on monetary policy after each MPM. The bank also holds regular press conferences by the chairman of the Policy Board - the Governor - to explain monetary policy decisions. The Bank also releases the Summary of Opinions at each MPM and the minutes of MPMs. The bank also releases its transcripts 10 years later to provide transparency regarding Policy Board decisions.

RELATED TERMS
  1. Bank

    A bank is a financial institution licensed as a receiver of deposits. ...
  2. National Bank

    In the United States a national bank is a commercial bank, while ...
  3. Tankan Survey

    An economic survey of Japanese business issued by the central ...
  4. Federal Reserve Bank Of New York

    The Federal Reserve bank that is responsible for the second district ...
  5. Universal Banking

    Universal banking is a banking system in which banks provide ...
  6. Japan ETFs

    A type of exchange-traded fund that invests the majority of its ...
Related Articles
  1. Investing

    Get To Know The Major Central Banks

    The policies of these banks affect the currency market like nothing else. See what makes them tick.
  2. Trading

    What forex traders need to know about the yen

    The Japanese yen possesses some unique qualities that traders should know before jumping in.
  3. Personal Finance

    What Is the Bank for International Settlements?

    Get the scoop on the structure and functions of the oldest global financial institution.
  4. Investing

    Bank of Japan Announces Negative Interest Rates

    In a surprising move after a two-day monetary review meeting that ended Friday, the Bank of Japan adopted a negative interest rate policy in an attempt to revive country’s economy.
  5. Insights

    Top 4 Central Banks Dominating the World Economy

    Central banks play an integral role in market economies by maintaining the stability and credibility of national currencies used in those economies.
  6. Personal Finance

    Retail Banking vs. Corporate Banking

    Retail banking is the visible face of banking to the general public. Corporate banking refers to the aspect of banking that deals with corporate customers. Check out more on the differences between ...
  7. Insights

    Bank of Japan Tweaks Its Monetary Policy Stance

    Japan’s fight against deflation hasn’t seen much success and its central bank has decided on using a different monetary ‘weapon’ this time around.
  8. Tech

    Can Bitcoin Kill Central Banks?

    Bitcoin is a peer-to-peer unofficial currency that operates without government or central bank oversight. Can Bitcoin kill off the need for central banks?
  9. Investing

    JSC Vs. EWJ: Comparing Japan ETFs

    Learn about the Japanese markets, the challenges faced in 2016 and comparative analysis of the SPDR Small Cap Japan ETF and the iShares Japan ETF.
  10. Financial Advisor

    Why Investors are Bailing on Japanese Stocks

    Foreign investors have pulled out of Japanese equities to the tune of $46 billion so far this year.
RELATED FAQS
  1. What's the difference between investment banks and commercial banks?

    Understand the principal differences between investment banks and commercial banks, and the areas of banking services that ... Read Answer >>
  2. How do investment banks help the economy?

    Learn more about the functions of investment banks in a modern economy and how investment banks have been treated differently ... Read Answer >>
  3. What are some roles of an investment bank?

    Explore the world of investment banking and discover the various functions investment bankers serve, such as handling IPOs ... Read Answer >>
Hot Definitions
  1. Economies of Scale

    Economies of scale refer to reduced costs per unit that arise from increased total output of a product. For example, a larger ...
  2. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
  3. Leverage

    Leverage results from using borrowed capital as a source of funding when investing to expand the firm's asset base and generate ...
  4. Financial Risk

    Financial risk is the possibility that shareholders will lose money when investing in a company if its cash flow fails to ...
  5. Enterprise Value (EV)

    Enterprise Value (EV) is a measure of a company's total value, often used as a more comprehensive alternative to equity market ...
  6. Relative Strength Index - RSI

    Relative Strength Indicator (RSI) is a technical momentum indicator that compares the magnitude of recent gains to recent ...
Trading Center