Japan's approach to monetary policy

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Giovanni P. Olivei (2002)
  • Subject: Monetary policy - Japan ; Bank of Japan ; Banks and banking, Central - Japan

The goal of monetary policy as conducted by the Bank of Japan is to contribute to the sound development of the national economy through the pursuit of price stability. The objective of price stability, however, is not precisely defined as it has been for other central banks. Following the implementation of the new Bank of Japan Law in 1998, the monetary policy framework is characterized by central bank independence, the primacy of the price stability objective, instrument independence, and policy decisions made by a monetary policy committee with regular meetings and published minutes. At its meetings, the monetary policy committee discusses the economic and financial situation and then decides matters relating to monetary policy, including the following: the guideline for money market operations; the official discount rate; reserve requirements ratios; the Bank's view of economic and financial developments; and the types, terms, and conditions of bills and bonds used in money market operations.
  • References (3)

    Bank of Japan. 2000. 2000 Annual Review. Tokyo: Bank of Japan.

    International Monetary Fund. 2000. Japan: Staff Report for the 2000 Article IV Consultation. IMF Staff Country Report No. 00/98.

    Miyanoya, Atsushi. 2000. “A Guide to the Bank of Japan's Market Operations.” Working paper, Bank of Japan's Financial Markets Department (August).

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