Bank of Japan

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Bank of Japan

 

central bank of issue of Japan. Established in 1882. It has a monopoly right to issue bank notes, is the banker of the government, and handles the cash execution of the budget and administration of the state debt. Bank of Japan bank notes have not been convertible into gold since December 1931. According to the law of 1942, a limit is imposed on their issue, and excesses are taxed. The Bank of Japan regulates interest rates on credit. Commercial banks are obligated (since 1957) to keep a certain proportion of their deposits in its accounts. The Bank of Japan performs the functions of a bankers’ bank, providing credit to banks by discounting promissory notes and by issuing loans. The bank invests large sums in bonds of joint-stock companies, thereby providing long-term credit. Jointly with the state monetary fund, the Bank of Japan at the beginning of 1969 owned currency reserves worth 1,046 billion yen ($2.9 billion), of which 12 percent was gold, and the rest, dollar holdings. In 1968 the Bank of Japan had 31 branches in Japan and a representative office in New York. Joint stock at the beginning of 1969 amounted to 100 million yen, of which 55 million yen belonged to the government. The remainder of the government’s deposits in the Bank of Japan totaled 74 billion yen, and investments by the Bank of Japan in state loan bonds totaled 1,434 billion yen. In the total balance at the beginning of 1969 of 4,669 billion yen, the issue of bank notes amounted to 4,042 billion yen; discounting, 340 billion yen; and loans to commercial banks, 1,223 billion yen. Deposits in bonds of joint-stock companies were 938 billion yen. On the bank’s credit side, gold totaled 31 billion yen and foreign exchange, 611 billion yen.

M. IU. BORTNIK

References in periodicals archive ?
Now, let us implement a monetary policy of a bond-buying operation where the BOJ buys 100 bonds from the private bank.
The yen surged broadly after the BOJ's decision, hitting a 22-month high of 104.06 yen to the dollar as well as multiyear highs against the euro and sterling.
The BOJ thus simultaneously faced two issues: a recession and a banking crisis.
DPJ sources said the party is set to give the nod to BOJ governor nominee Haruhiko Kuroda as well as Nakaso for one of the deputy governor posts but may reject Iwata, a strong advocate of bolder monetary easing to achieve the 2 percent inflation target.
"I'm not sure how the BOJ would justify not doing anything beyond keeping rates near zero when it's predicting three years of deflation," said Hirokata Kusaba, senior economist at Mizuho Research Institute.
When the BOJ first adopted "quantitative easing" in 2001, its focus for monetary policy shifted from interest rate targets to current account balances and other liquidity targets.
In Japan, the follow-on bubble that the BOJ created in the Japanese government bond (JGB) market has allowed the government to lose all semblance of budgetary discipline and has encouraged politicians to push through wasteful spending programs.
in 2008, Nakaso, as director general at the BOJ's Financial Markets Department, consulted closely with central banks in Europe and the United States to hammer out steps to provide ample liquidity to the financial system.
To counter possible adverse effects such as an asset bubble that could stem from excessive monetary easing, he said the BOJ would flexibly review its policy to stabilize inflation at around 2 percent.
"The BoJ doesn t target currency rates but deals with the effect of exchange rate moves.
However, beyond that measure, analysts and BOJ sources have pointed out that Japan does not, in fact, have many policies to choose from beyond more costly intervention.
The limited impact of monetary easing is recognized even by many of those who press the BOJ to conduct more "unconventional stimulus." Consider this statement: "Unless banks make progress on bad-debt disposal, the monetary easing by the Bank of Japan will not produce results, making it impossible to beat deflation." It sounds like the BOJ, but the actual speaker was Heizo Takenaka, the minister for both economic policy and financial services.