Bank of Japan
Encyclopedia
is the central bank
of Japan
. The Bank is often called for short. It has its headquarters in Chuo
, Tokyo
.
. 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 (1871) did away with these and established the yen as the new decimal currency, which had parity with the Mexican silver dollar. The former han
(fiefs) became prefecture
s 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 (1882) after a Belgian model. It has since been partly privately owned (its stock is traded over the counter, hence the stock number). 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 (May 1884), the Bank of Japan issued its first banknotes in 1885 (Meiji 18). 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.
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' (窓口指導） credit controls (which are the model for the Chinese central bank's primary tool of monetary policy implementation), 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' (営業局）, which was headed during the 'bubble years' from 1986 to 1989 by Toshihiko Fukui
(who became deputy governor in the 1990s and governor in 2003).
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:
However, since the introduction of the new law, the Bank of Japan has persistently rebuffed government requests to stimulate the economy.
According to its charter, the missions of the Bank of Japan are
, Tokyo
, on the site of a former gold mint (the Kinza) 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.
, ending a power vacuum at the central bank's helm by approving the government's third candidate for the job. In a House of Representatives of Japan
-hearing April 8, 2008, Shirakawa said he would maintain the bank's independence and transparency.
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
of Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
. The Bank is often called for short. It has its headquarters in Chuo
Chuo, Tokyo
is one of the 23 special wards that form the heart of Tokyo, Japan. The ward refers to itself as Chūō City in English.Its Japanese name literally means "Central Ward," and it is historically the main commercial center of Tokyo, although Shinjuku has risen to challenge it since the end of World War II...
, Tokyo
Tokyo
, ; officially , is one of the 47 prefectures of Japan. Tokyo is the capital of Japan, the center of the Greater Tokyo Area, and the largest metropolitan area of Japan. It is the seat of the Japanese government and the Imperial Palace, and the home of the Japanese Imperial Family...
.
History
Like most modern Japanese institutions, the Bank of Japan was founded after the Meiji RestorationMeiji Restoration
The , also known as the Meiji Ishin, Revolution, Reform or Renewal, was a chain of events that restored imperial rule to Japan in 1868...
. Prior to the Restoration, Japan's feudal fiefs all issued their own money, hansatsu
Scrip of Edo period Japan
During the Edo period, feudal domains of Japan issued scrip called ' for use within the domain. This paper currency supplemented the coinage of the Tokugawa shogunate. Most scrip carried a face value in silver coinage, but gold and copper scrip also circulated. In addition, some scrip was marked...
, in an array of incompatible denominations, but the New Currency Act of Meiji 4 (1871) did away with these and established the yen as the new decimal currency, which had parity with the Mexican silver dollar. The former han
Han (Japan)
The or domain was the name of the estate belonging to a warrior in Japan after the 17th century. The fiefs of the daimyos of the samurai class of Japan during the Edo period were called han.-Edo period:...
(fiefs) became prefecture
Prefectures of Japan
The prefectures of Japan are the country's 47 subnational jurisdictions: one "metropolis" , Tokyo; one "circuit" , Hokkaidō; two urban prefectures , Osaka and Kyoto; and 43 other prefectures . In Japanese, they are commonly referred to as...
s 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 (1882) after a Belgian model. It has since been partly privately owned (its stock is traded over the counter, hence the stock number). 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
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
on controlling the money supply
Money supply
In economics, the money supply or money stock, is the total amount of money available in an economy at a specific time. There are several ways to define "money," but standard measures usually include currency in circulation and demand deposits .Money supply data are recorded and published, usually...
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 (May 1884), the Bank of Japan issued its first banknotes in 1885 (Meiji 18). 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
Gold standard
The gold standard is a monetary system in which the standard economic unit of account is a fixed mass of gold. There are distinct kinds of gold standard...
and in 1899 the former "national" banknotes were formally phased out.
Reorganization
The BOJ was reorganized in 1942 Under the . 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' (窓口指導） credit controls (which are the model for the Chinese central bank's primary tool of monetary policy implementation), 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' (営業局）, which was headed during the 'bubble years' from 1986 to 1989 by Toshihiko Fukui
Toshihiko Fukui
is a Japanese economist and central banker. He was the 29th Governor of the Bank of Japan and a Director of the Bank for International Settlements . -Career:...
(who became deputy governor in the 1990s and governor in 2003).
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.
Mission
- Issuance and management of banknoteBanknoteA banknote is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. In addition to coins, banknotes make up the cash or bearer forms of all modern fiat money...
s - Implementation of monetary policyMonetary policyMonetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment...
- Providing settlementSettlement (finance)Settlement of securities is a business process whereby securities or interests in securities are delivered, usually against payment of money, to fulfill contractual obligations, such as those arising under securities trades....
services and ensuring the stability of the financial system - TreasuryTreasuryA treasury is either*A government department related to finance and taxation.*A place where currency or precious items is/are kept....
and government securitiesSecurity (finance)A security is generally a fungible, negotiable financial instrument representing financial value. Securities are broadly categorized into:* debt securities ,* equity securities, e.g., common stocks; and,...
-related operations - International activities
- Compilation of data, economic analyses and research activities
Location
The Bank of Japan is headquartered in NihonbashiNihonbashi
, or Nihombashi, is a business district of Chūō, Tokyo, Japan which grew up around the bridge of the same name which has linked two sides of the Nihonbashi River at this site since the 17th century. The first wooden bridge was completed in 1603, and the current bridge made of stone dates from 1911...
, Tokyo
Tokyo
, ; officially , is one of the 47 prefectures of Japan. Tokyo is the capital of Japan, the center of the Greater Tokyo Area, and the largest metropolitan area of Japan. It is the seat of the Japanese government and the Imperial Palace, and the home of the Japanese Imperial Family...
, on the site of a former gold mint (the Kinza) and, not coincidentally, near the famous Ginza
Ginza
is a district of Chūō, Tokyo, located south of Yaesu and Kyōbashi, west of Tsukiji, east of Yūrakuchō and Uchisaiwaichō, and north of Shinbashi.It is known as an upscale area of Tokyo with numerous department stores, boutiques, restaurants and coffeehouses. Ginza is recognized as one of the most...
district, whose name means "silver mint".
The Neo-baroque
Neo-baroque
The Baroque Revival or Neo-baroque was an architectural style of the late 19th century. The term is used to describe architecture which displays important aspects of Baroque style, but is not of the Baroque period proper—i.e., the 17th and 18th centuries.Some examples of Neo-baroque architecture:*...
Bank of Japan building in Tokyo was designed by Tatsuno Kingo
Tatsuno Kingo
was a Japanese architect born in Karatsu, Saga Prefecture, Kyushu.He studied in Japan at the Imperial College of Engineering where he was one of the first to graduate in 1879 under British architect Josiah Conder. He visited England and worked in the office of William Burges in 1881-2. He taught...
in 1896.
The Osaka
Osaka
is a city in the Kansai region of Japan's main island of Honshu, a designated city under the Local Autonomy Law, the capital city of Osaka Prefecture and also the biggest part of Keihanshin area, which is represented by three major cities of Japan, Kyoto, Osaka and Kobe...
branch in Nakanoshima
Nakanoshima
Nakanoshima is a 3 km long and 50 hectares narrow sandbank in Kita-ku, Osaka city, Japan, that divides the Kyū-Yodo River into the Tosabori and Dōjima rivers...
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 April 9, 2008, Masaaki ShirakawaMasaaki Shirakawa
is a Japanese economist, central banker and the 30th Governor of the Bank of Japan . He is also a Director and Vice-Chairman of the Bank for International Settlements .-Early life:...
, ending a power vacuum at the central bank's helm by approving the government's third candidate for the job. In a House of Representatives of Japan
House of Representatives of Japan
The is the lower house of the Diet of Japan. The House of Councillors of Japan is the upper house.The House of Representatives has 480 members, elected for a four-year term. Of these, 180 members are elected from 11 multi-member constituencies by a party-list system of proportional representation,...
-hearing April 8, 2008, Shirakawa said he would maintain the bank's independence and transparency.
List of governors
- Yoshihara ShigetoshiYoshihara Shigetoshiwas a Japanese businessman, central banker and the 1st Governor of the Bank of Japan .-Early life:Yoshihara was born in Kagoshima Prefecture. He studied in England and the United States between 1866 and 1873.-Career:...
(October 6, 1882 – December 19, 1887) - Tomita TetsunosukeTomita Tetsunosukewas a Japanese businessman, central banker and the 2nd Governor of the Bank of Japan . He was a member of Japan's House of Peers.-Career:Tomita was an organizer of the Bank of Japan...
(February 21, 1888 – September 3, 1889) - Kawada KoichiroKawada Koichirowas a Japanese businessman, central banker and the 3rd Governor of the Bank of Japan . He was created a Baron; and he was a member of Japan's House of Peers.-Career:...
(September 3, 1889 – November 7, 1896) - Iwasaki YanosukeIwasaki Yanosukewas a Japanese businessman, central banker and the 4th Governor of the Bank of Japan . He was created a Baron in 1900; and he was a member of Japan's House of Peers.-Early life:Iwasaki was born in Kochi Prefecture...
(November 11, 1896 – October 20, 1898) - Tatsuo Yamamoto (October 20, 1898 – October 19, 1903)
- Shigeyoshi MatsuoShigeyoshi Matsuowas a Japanese businessman, central banker and the 6th Governor of the Bank of Japan . He was a Baron and a member of Japan's House of Peers from 1900 through 1916.-Career:In 1900, Matsuo had risen to the position of bureau chief in the Finance Ministry....
(October 20, 1903 – June 1, 1911) - Korekiyo Takahashi (June 1, 1911 – February 20, 1913)
- Yatarō MishimaYatarō Mishimawas a Japanese businessman, central banker and the 8th Governor of the Bank of Japan . Viscount Mishima was a member of Japan's House of Peers.-Early life:Mishima was born in Kagoshima Prefecture....
(February 28, 1913 – March 7, 1919). - Junnosuke InoueJunnosuke Inouewas a Japanese businessman and central banker. He was the 9th and 11th Governor of the Bank of Japan .-Career:In 1897, Inoue was a BOJ trainee along with Hisaakira Hijikata...
(March 13, 1919 – September 2, 1923) - Otohiko Ichiki (September 5, 1923 – May 10, 1927)
- Junnosuke Inoue (May 10, 1927 – June 1, 1928)
- Hisaakira HijikataHisaakira Hijikatawas a Japanese businessman, central banker and the 12th Governor of the Bank of Japan .-Career:In 1897, Hijikata was a BOJ trainee along with Junnosuke Inoue...
(June 12, 1928 – June 4, 1935) - Eigo FukaiEigo Fukaiwas a Japanese businessman, central banker and the 13th Governor of the Bank of Japan .-Career:Fukai was the aide to Takahashi Korekiyo, who was responsible for negotiating war loans to pay for Japan's participation in the Russo-Japanese War....
(June 4, 1935 – February 9, 1937) - Seihin IkedaSeihin Ikedawas a Japanese businessman and central banker. He was the 14th Governor of the Bank of Japan .-Early life:Ikeda was born at Yonezawa in Yamagata Prefecture. He was educated at Keio University and Harvard University, class of 1895.-Career:...
(February 9, 1937 – July 27, 1937) - Toyotaro Yuki (July 27, 1937 – March 18, 1944)
- Keizo Shibusawa (March 18, 1944 – October 9, 1945)
- Eikichi ArakiEikichi Arakiwas a Japanese businessman and central banker. He was the 17th and 19th Governor of the Bank of Japan .-Career:Araki was Governor of the Bank of Japan from from October 9, 1945 to June 1, 1946 and again from December 11, 1954 to November 30, 1956....
(October 9, 1945 – June 1, 1946) - Hisato IchimadaHisato Ichimadawas a Japanese businessman, central banker and the 18th Governor of the Bank of Japan .-References:*Werner, Richard A. . Princes of the Yen: Japan's Central Bankers and the Transformation of the Economy. Armonk, New York: M.E. Sharpe. 10-ISBN 0765610485; 13-ISBN 9780765610485;...
(June 1, 1946 – December 10, 1954) - Eikichi Araki (December 11, 1954 – November 30, 1956)
- Masamichi YamagiwaMasamichi Yamagiwawas a Japanese businessman, central banker, the 20th Governor of the Bank of Japan .-Career:Yamagiwa was Governor of the Bank of Japan from November 30, 1956 through December 17, 1964....
(November 30, 1956 – December 17, 1964) - Makoto UsamiMakoto Usamiwas a Japanese businessman, central banker, the 21st Governor of the Bank of Japan .-Career:Usami was Governor of the Bank of Japan from December 17, 1964 to December 16, 1969, During Usami's tenure, the Bank was concerned with ensuring the stability of the Japanese yen in relation to other...
(December 17, 1964 – December 16, 1969) - Tadashi SasakiTadashi SasakiTadashi Sasaki is a classical guitarist born in Tokyo, Japan. Today he lives in Germany, where he is a professor at in Aachen.In 1968, Tadashi Sasaki was the first Japanese to win the international guitar competition in Paris. He served as a juror in the Heinsberg International Guitar Festival and...
(December 17, 1969 – December 16, 1974) - Teiichiro MorinagaTeiichiro Morinagais a Japanese businessman, central banker, the 23rd Governor of the Bank of Japan .-Selected works:In a statistical overview derived from writings by and about Teiichiro Morinaga, OCLC/WorldCat encompasses roughly 2 works in 4 publications in 1 language and 6 library holdings.* 財政会計辞典 * 損害賠償と保険...
(December 17, 1974 – December 16, 1979) - Haruo MaekawaHaruo Maekawa, also romanized as Mayekawa, was a Japanese businessman, central banker, the 24th Governor of the Bank of Japan .-Career:Before rising to become head of the Bank of Japan, Maekawa held a other bank positions, including director of foreign-exchange operations.Maekawa was Governor of the Bank of...
(December 17, 1979 – December 16, 1984) - Satoshi SumitaSatoshi Sumitawas a Japanese businessman, central banker, the 25th Governor of the Bank of Japan during a period in which Japan became the world's largest creditor nation.-Career:...
(December 17, 1984 – December 16, 1989) - Yasushi MienoYasushi Mienois a Japanese businessman, central banker, the 26th Governor of the Bank of Japan and a Director of the Bank for International Settlements .-Career:From April 1975 through February 1978, Mieno was head of the BOJ banking department....
(December 17, 1989 – December 16, 1994) - Yasuo MatsushitaYasuo Matsushitawas a Japanese businessman, central banker, the 27th Governor of the Bank of Japan and a Director of the Bank for International Settlements .-Early life:Matsushita was born in Hyogo prefecture...
(December 17, 1994 – March 20, 1998) - Masaru HayamiMasaru HayamiMasaru Hayami was a Japanese businessman, central banker, the 28th Governor of the Bank of Japan and a Director of the Bank for International Settlements .-Early life:Hayami was born in Hyogo Prefecture...
(March 20, 1998 – March 19, 2003) - Toshihiko FukuiToshihiko Fukuiis a Japanese economist and central banker. He was the 29th Governor of the Bank of Japan and a Director of the Bank for International Settlements . -Career:...
(March 20, 2003 – March 19, 2008) - Masaaki ShirakawaMasaaki Shirakawais a Japanese economist, central banker and the 30th Governor of the Bank of Japan . He is also a Director and Vice-Chairman of the Bank for International Settlements .-Early life:...
(March 20, 2008 – )
See also
- Japanese yenJapanese yenThe is the official currency of Japan. It is the third most traded currency in the foreign exchange market after the United States dollar and the euro. It is also widely used as a reserve currency after the U.S. dollar, the euro and the pound sterling...
- Bank of EnglandBank of EnglandThe Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694, it is the second oldest central bank in the world...
- European Central BankEuropean Central BankThe European Central Bank is the institution of the European Union that administers the monetary policy of the 17 EU Eurozone member states. It is thus one of the world's most important central banks. The bank was established by the Treaty of Amsterdam in 1998, and is headquartered in Frankfurt,...
- Federal Reserve
- Economy of JapanEconomy of JapanThe economy of Japan, a free market economy, is the third largest in the world after the United States and the People's Republic of China, and ahead of Germany at 4th...
External links
Bank of Japan official site- Building a national currency (1868-99)
- Japan and World Interest Rates, Interest Rates data and chart daily updated by ForexMotion