Thus, the bank's autonomy and independence are granted from the standpoint of ensuring long-term public welfare and political neutrality.

[7] The former han (fiefs) became prefectures and their mints became private chartered banks which, however, initially retained the right to print money.

Despite some small glitches—for example, it turned out that the konjac powder mixed in the paper to prevent counterfeiting made the bills a delicacy for rats—the run was largely successful.

In the early 20th century the Bank of Japan, while a private-sector institution, worked in close coordination with the Japanese government and took direction from the minister of Finance.

Its governor, as Takahashi Korekiyo put it, was considered "the number-one representative of the business world" in Japan's institutional system.

[19] When the Nixon shock happened in August 1971, the Bank of Japan (BOJ) could have appreciated the currency in order to avoid inflation.

In order to control stagflation, they raised the official bank rate from 7% to 9% and skyrocketing prices gradually ended in 1978.

In order to escape deflation, the BOJ cut the official bank rate from 5% to 4.5% in January, to 4.0% in March, to 3.5% in April, 3.0% in November.

After the Louvre Accord in February 1987, the BOJ decreased the official bank rate from 3% to 2.5%, but JPY/USD was 140yen/$ at that time and reached 125yen/$ in the end of 1987.

Financial and fiscal regulation led to a widespread over-valuing of real estate and investments and Japan faced a bubble at that time.

BOJ reduced the uncollateralized call rate to 0.3% and adopted the supplemental balance of current account policy.

[22] In 2016, the BOJ initiated yield curve control (YCC),[23] and started its negative interest rates policy (NIRP).

[25][26][27] In 2024, following announcements of about 5% wage growth by Japan's largest companies,[28] the BOJ ended eight year of negative interest rates by setting new short term targets of 0 to 0.1%.

This revision affirmed the Bank's operation independent from the government (primarily the Ministry of Finance), and removed the provisions established in 1942, which had been problematic.

Japan has long suffered deflation and disinflation since the 1990s, which has been blamed as one of the main causes of the long-term economic downturn of the once world's second largest economy.

The neo-baroque Bank of Japan building in Tokyo was designed by Tatsuno Kingo in 1896 and built under the direction of entrepreneur Shibusawa Eiichi.

[41] The governor of the Bank of Japan (総裁, sōsai) has considerable influence on the economic policy of the Japanese government.

(Ministry of Finance) President of ADB University of Oxford (MPhil) Massachusetts Institute of Technology (PhD) As of 9 April 2023, the board responsible for setting monetary policy consisted of the following 9 members:[43]