BOJ

The Bank of Japan (BoJ) is the central bank of Japan. It is responsible for issuing banknotes, implementing monetary policy, and maintaining the stability of the financial system. The BoJ also acts as the government’s fiscal agent, managing government deposits and, in some cases, government bond operations. In addition, it operates and oversees payment and settlement systems that enable interbank transfers and other core financial functions.

Headquartered in Tokyo, the BoJ was established in 1882 and operates under the Bank of Japan Act. Its policy decisions are made by the Policy Board, which consists of the Governor, two Deputy Governors, and six other members. Members are appointed by the Cabinet with the Diet’s approval and serve fixed terms. The Governor serves as chair of the board.

Monetary policy is the BoJ’s primary instrument for achieving price stability and supporting economic activity. It employs a range of tools, including short-term interest rate policy, asset purchases, and liquidity operations. Since 2013, the BoJ has pursued large-scale asset purchases (commonly described as QQE) to expand the monetary base. In 2016, it introduced a negative interest rate policy and implemented yield curve control to influence longer-term rates. The BoJ also purchases government bonds, exchange-traded funds, and real estate investment trusts as part of its asset management operations.

The BoJ operates with a degree of independence but remains accountable to the government and the Diet, coordinating with other authorities such as the Ministry of Finance and the Financial Services Agency to ensure financial system stability and sound macroeconomic policy.