The Bank Of Japan ( Boj )

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1. TheBank of Japan 1.1. History, structure and function The Bank of Japan (BOJ) was founded in June, 1882 and started to operate in October of the same year. The BOJ’s top decision-making body is called “the Policy Board”, which decides its operations and sets up guidelines as to the monetary policy. The Policy Board is composed of nine members; a governor, two deputy governors and six executive directors. The majority rule applies to the board decision-making. As for the process of appointments of the Policy Board members, the Cabinet first appoints them, and then it has to have the Diet approve the appointment (“Organization”). As the central bank of Japan, the BOJ broadly has two objectives, that is, stabilizing prices and the financial system. The price stability is set to be two percent in terms of the annual rate of change in the consumer price index (“Price stability”). Regarding the relation with the government, the Bank of Japan Act was fixed in 1997 and made clear the independence of the BOJ from the government. The Act bans the Cabinet from firing the board members in the middle of their terms. 1.2 Response to the 2008 financial crisis The BOJ took a series of monetary policies responding to the 2008 financial crisis. However, compared to the responses of the FRB and the ECB, that of the BOJ was relatively reserved. This was partly because the interest rate in Japan was already low enough when the crisis took place and because the Japanese
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