Bank of Japan (BoJ)

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This entry sits under financial-regulators INDEX. Read it against Financial Services Agency (FSA) for the regulatory counterpart, Deposit Insurance Corporation of Japan (DIC) for the safety-net peer, and BoJ monetary policy / Financial Markets Department (BoJ Financial Markets Department) for internal organs.

TL;DR

Japan’s central bank (established 1882-10-10, JASDAQ subscription-certificate code 8301). The 1997 fully revised Bank of Japan Act codified the “independence of monetary-policy decisions,” the “price-stability mandate,” and “operational transparency.” 4 core functions: currency issuance (Bank of Japan notes), monetary policy (steering short-term and long-term rates), bank of banks (opening private-bank accounts / fund settlement = BoJ-NET), and government’s bank (treasury-fund operations + JGB issuance / circulation). The Policy Board (Governor + 2 名 Deputy Governors + 6 名 Policy Board members = 9 名 in total) decides monetary policy. 2013-04 BoJ monetary policy → 2016 QQE with a negative interest rate → 2024-03 removal of the negative rate and YCC → 2024-07 start of rate hikes → transition to the 2024-2025 rate-hike cycle. The balance of long-term JGB holdings exceeded 600 兆円 at the 2024 peak, among the largest in the world.

1. Legal basis / establishment

Legal name: Bank of Japan English name: Bank of Japan (BoJ) Legal basis: Bank of Japan Act (平成 9 年 Act 第 89 号, enacted 1998-04-01) Established: 1882-10-10 (Meiji 15 ) Head office: Nihonbashi-Hongokucho, Chuo-ku, Tokyo 2-1-1 Type: authorized corporation (similar to a special corporation; JASDAQ-listed subscription certificate 8301) Supervisor: Ministry of Finance (personnel / budget) + Financial Services Agency (FSA) (cooperation)

Capital structure

Capital 1 億円 (subscription certificate = similar to a share but without voting rights)
Government subscription 55% + private subscription 45%
JASDAQ subscription-certificate code 8301 (tradable but with a dividend cap and no voting rights)

Key chronology

Date	Event
1882-10-10	Bank of Japan established (Matsukata Masayoshi’s fiscal consolidation / silver-standard foundation)
1885	Bank of Japan notes (the first banknotes) began to be issued
1897	Shift to the gold standard
1942	Old Bank of Japan Act (strongly wartime-control-tinged)
1997-06	New Bank of Japan Act enacted (independence of monetary policy established)
1998-04-01	New Bank of Japan Act came into force (Policy Board inaugurated, Inspection Bureau abolished)
1999-02	Zero interest-rate policy (first time)
2001-03	Quantitative easing (QE) introduced (the world’s first full-scale unconventional monetary policy)
2006-03	QE lifted → short-term rate 0.25%
2008-09	Lehman shock → emergency liquidity provision / purchases of corporate bonds, etc.
2010-10	Comprehensive Monetary Easing (CME) begun
2013-04	Governor Haruhiko Kuroda took office → Quantitative and Qualitative Easing (QQE) begun (monetary base 2 -doubled)
2014-10	QQE expansion No. 2
2016-01	QQE with a negative interest rate introduced (complementary deposit facility -0.1%)
2016-09	Yield Curve Control (YCC) introduced (steering the 10 -year rate to around 0%)
2018-07	YCC flexibilization (10 -year rate fluctuation band ±0.2%)
2021-03	YCC fluctuation band ±0.25%
2022-12	YCC fluctuation band ±0.5%
2023-04	Governor Kazuo Ueda took office (end of the 10 -year Kuroda regime; the first economist governor in the postwar era)
2023-07	YCC flexibilization (with 1.0% as the reference upper bound)
2024-03-19	Negative rate and YCC removed → short-term rate 0-0.1% (first rate hike in 17 years)
2024-07-31	Policy rate hiked to 0.25% (additional rate hike)

1) Currency issuance

Bank of Japan notes (banknotes): issued exclusively by the BoJ (coins are issued by the government)
2024-07-03 issuance of new banknotes (Shibusawa Eiichi / Tsuda Umeko / Kitasato Shibasaburo)
Circulation balance on the order of approx. 130 兆円

2) Monetary policy (→ BoJ monetary policy)

Price-stability target 2% (joint statement with the 2013 government)
Policy tools: short-term rate + the tiered current-account structure + long-term JGB purchases + ETF / J-REIT purchases + lending support
Policy Board 9 名 (Governor + 2 Deputy Governors + 6 Policy Board members), by majority vote
8 Monetary Policy Meetings (MPC) per year

3) Bank of banks (→ Boj Financial System Dept)

Opens BoJ current accounts for private banks
Operates BoJ-NET (the real-time gross settlement system)
Lender-of-last-resort function
Inspection / monitoring of financial institutions (division of labour / cooperation with Financial Services Agency (FSA))

4) Government’s bank

Receipts-and-payments operations for treasury funds (taxes + public-debt proceeds)
Issuance / circulation / redemption operations for JGBs
Acting as agent for FX-market intervention (on the Finance Minister’s instruction)
Acting as agent for managing foreign reserves

3. Organizational structure

Governor (5 -year term, appointment with both houses' consent)
   ├── Deputy Governors 2 名
   ├── Policy Board members 6 名 (from academia / industry / financial sector)
   │   = Policy Board 9 名 (monetary-policy decisions)
   │
   ├── [[financial-regulators/boj-monetary-policy|企画局]] ── monetary-policy planning / MPC secretariat
   ├── [[financial-regulators/boj-financial-markets-dept|金融市場局]] ── market operations / JGB trading
   ├── [[financial-regulators/boj-financial-system-dept|金融機構局]] ── financial-institution examination / monitoring
   ├── [[financial-regulators/boj-payment-settlement-dept|決済機構局]] ── BoJ-NET / settlement systems
   ├── [[financial-regulators/boj-international-dept|国際局]] ── international operations / G7/G20  central-bank cooperation
   ├── Research and Statistics Department ── economic statistics / Tankan / price analysis
   ├── Currency Issue Department ── banknote production / circulation management
   ├── Operations Department ── treasury-fund operations
   └── Policy Board Secretariat / Board of Auditors / branches (32  branches)

Removal of the negative rate and YCC (2024-03)

The first effective rate hike in 17 years
Confirmation of the virtuous cycle of wages and prices → the sustainable and stable achievement of the 2% price target comes into view
ETF / J-REIT purchases also stopped for new purchases

Start of QT (quantitative tightening)

Phased reduction of the long-term JGB purchase amount (2024-07 month 6 兆円 → 2025-1Q month, targeting around 3 兆円)
Normalization of the BoJ balance sheet (760 兆円 at the peak) is a long-term challenge
Avoiding a market shock from the exit strategy is a point of debate

Yen carry trade / FX

Narrowing of the Japan-US rate differential → repricing of FX toward yen appreciation
2024-08 円 unwinding of carry → the Nikkei Average broke below 4 万円 → market-stabilization remarks by the BoJ Deputy Governor
Depending on the pace of rate hikes, this spills over into FX, JGB yields, and equities

Digital yen (CBDC)

2023-04 start of pilot experiments

Sources

Wikipedia: Bank of Japan (https://ja.wikipedia.org/wiki/日本銀行, extracted 2026-05-25)
Bank of Japan official site (https://www.boj.or.jp/, accessed 2026-05-25)
Bank of Japan organizational structure (https://www.boj.or.jp/about/organization/index.htm, accessed 2026-05-25)
Bank of Japan Act (平成 9 年 Act 第 89 号)
Bank of Japan Monetary Policy Meeting minutes (public portions, each session)

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