Bank Of Japan

Japan has gone through a lot of crises both political and economic. Yet, it managed to be one of the economic super powers in the world and the Central Bank of Japan is one to be thanked for the country’s economic success.

The Bank of Japan serves as the central bank of Japan. And like other central banks in the world, it is tasked to oversee the overall economic health of Japan, which is now one of the successfully economically developed countries in the world. In fact, Japan is the world’s 3rd biggest economy today and continues to strive financial success despite the global economic crisis.

To further understand why the Bank of Japan is influential in the economic success of Japan, one should know the functions of the bank and its impact on our lives.

Sporting a Neo-baroque architecture, the headquarter building of the Bank of Japan can be found in Nihonbashi, Tokyo. Historically, the bank began operations on October 10, 1882 following the Bank of Japan Act promulgated on June 1882 under the Meji government. The bank was later reorganized in May 1942 to address wartime situation that left the country really devastated. This reorganization was proven successful given the progressive economy of Japan today.

Since it is a central bank, the Bank of Japan does not render common banking services to the public. Thus, one can neither open a savings account in the bank nor apply for a bank loan. The only people who can step inside the bank to avail these common banking services are the government and the bank owners. If you come to think of it, common people actually avail banking services from the central bank only that it is channeled through your local banks, which the central bank also regulates so people would be protected from illegal and fraudulent transactions.

More than common banking services such as safekeeping your money and lending loans, the Bank of Japan renders a more significant role in our lives.

On its official website, the bank is introduced as a juridical entity not owned by the government or private corporation. It further highlighted the objectives of the Bank of Japan as the sole authorized issuer of bank notes and economic manager of currency and monetary control, which is aimed at pursuing price stability and sound national economy.

In simple words, the bank has control or power in dictating the prices of goods and services in the market. Whether it is high or low, market prices are dependent on the economic well being of the country. Although independent from government control, the central bank will have to peg its monetary policy from the economic goals of the government.

An example of this economic goal is boosting the export industry of Japan. The Bank of Japan currency exchange, for instance, is kept low in order to advance the export industry of the country. If Japan’s currency is kept low, more importers from other countries will be encouraged or attracted to buy export products of Japan that would help its economy since it will gain or earn more dollar reserves from export purchasing countries. This is just one of the monetary policies of the Bank of Japan that has helped revived the once war-stricken economy of the country.

On its latest disclosure the bank is capitalized at 100 million yen and continues to bank on export markets to further boost its economy. Giving loan priorities to manufacturing companies as well as the agriculture sector, both of which produce export products, is also one of the monetary economic policies implemented by the bank.