Bank of Japan

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Bank of Japan 日本銀行 (Japanese)
Bank of Japan logo BOJ headquarters in Tokyo
Headquarters	Tokyo, Japan
Coordinates	35°41′10″N 139°46′17″E / 35.6861°N 139.7715°E / 35.6861; 139.7715
Established	1882
Governor	Masaaki Shirakawa
Central Bank of	Japan
Currency	Japanese yen
ISO 4217 Code	JPY
Base borrowing rate	0.105%
Website	www.boj.or.jp
Preceded by	First National Bank

The Bank of Japan (日本銀行, Nippon Ginkō^?, BOJ, JASDAQ: 8301) is the central bank of Japan. The Bank is often called Nichigin (日銀^?) for short.

History

The place of the foundation of the Bank of Japan

Like most modern Japanese institutions, the Bank of Japan was born 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 (1871) did away with these and established the yen as the new decimal currency. The former han (fiefs) 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 (1882) after a Belgian model.^[1] A number of modifications based on other national banks were encompassed within the regulations under which the bank was founded.^[2] 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.^[3]

Wikisource has original text related to this article: Bank of Japan Act

Following the passage of the Convertable 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.

The Bank of Japan has operated continuously since its founding, with the exception of a brief post-WW2 hiatus when the occupying Allies issued military currency and restructured the Bank into a more independent entity.

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.^[4]

A major 1997 revision of the Bank of Japan Act (jp:日本銀行法) was designed to give it greater independence;^[5] however, the Bank of Japan has been criticized for lack of independence. A certain degree of dependence is enshrined in the Law itself, 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.

Missions

The Bank of Japan Osaka Branch

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 (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 of the Bank of Japan is seen in the top right of this 1930 aerial photograph. The wide street in front of the bank is part of the Mido-Suji.

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 (総裁, sōsai) 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 Shirakawa, 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.[1]

List of governors

1. Mr. Shigetoshi Yoshihara (October 6, 1882 – December 19, 1887)
2. Mr. Tetsunosuke Tomita (February 21, 1888 – September 3, 1889)
3. Mr. Koichiro Kawada (September 3, 1889 – November 7, 1896)
4. Baron Yanosuke Iwasaki (November 11, 1896 – October 20, 1898)
5. Mr. Tatsuo Yamamoto (October 20, 1898 – October 19, 1903)
6. Baron Shigeyoshi Matsuo (October 20, 1903 – June 1, 1911)
7. Mr. Korekiyo Takahashi (June 1, 1911 – February 20, 1913)
8. Viscount Yataro Mishima (February 28, 1913 – March 7, 1919).^[6]
9. Mr. Junnosuke Inoue (March 13, 1919 – September 2, 1923)
10. Mr. Otohiko Ichiki (September 5, 1923 – May 10, 1927)
11. Mr. Junnosuke Inoue — second term (May 10, 1927 – June 1, 1928)
12. Mr. Hisaakira Hijikata (June 12, 1928 – June 4, 1935)
13. Mr. Eigo Fukai (June 4, 1935 – February 9, 1937)
14. Mr. Seihin Ikeda (February 9, 1937 – July 27, 1937)
15. Mr. Toyotaro Yuki (July 27, 1937 – March 18, 1944)
16. Viscount Keizo Shibusawa (March 18, 1944 – October 9, 1945)
17. Mr. Eikichi Araki (October 9, 1945 – June 1, 1946)
18. Mr. Hisato Ichimada (June 1, 1946 – December 10, 1954)
19. Mr. Eikichi Araki — second term (December 11, 1954 – November 30, 1956)
20. Mr. Masamichi Yamagiwa (November 30, 1956 – December 17, 1964)
21. Mr. Makoto Usami (December 17, 1964 – December 16, 1969)
22. Mr. Tadashi Sasaki (December 17, 1969 – December 16, 1974)
23. Mr. Teiichiro Morinaga (December 17, 1974 – December 16, 1979)
24. Mr. Haruo Maekawa (December 17, 1979 – December 16, 1984)
25. Mr. Satoshi Sumita (December 17, 1984 – December 16, 1989)
26. Mr. Yasushi Mieno (December 17, 1989 – December 16, 1994)
27. Mr. Yasuo Matsushita (December 17, 1994 – March 20, 1998)
28. Mr. Masaru Hayami (March 20, 1998 – March 19, 2003)
29. Mr. Toshihiko Fukui (March 20, 2003 – March 19, 2008)
30. Prof. Masaaki Shirakawa (March 20, 2008 – )

Monetary Policy Board

As of October 2008, the board responsible for setting monetary policy consisted of the following 8 members:[2]
1. Masaaki Shirakawa, Governor of the BOJ
2. Hirohide Yamaguchi, Deputy Governor of the BOJ
3. Kiyohiko G. Nishimura, Deputy Governor of the BOJ
4. Miyako Suda
5. Atsushi Mizuno
6. Tadao Noda
7. Seiji Nakamura
8. Hidetoshi Kamezaki

See also

• Japanese yen
• Bank of England
• European Central Bank
• Federal Reserve
• Economy of Japan

Notes

References

External links

• (Japanese) (English) 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

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