Bank of Japan [BOJ]

The Bank of Japan (BOJ) is Japan’s central bank, established in 1882, responsible for issuing currency, implementing monetary policy, and maintaining financial system stability. The BOJ pioneered many unconventional monetary policies while combating decades of deflation following Japan’s 1990s asset bubble collapse. It introduced zero interest rates in 1999, quantitative easing in 2001 (before other major central banks), and negative interest rates in 2016. The BOJ’s current policy framework includes Yield Curve Control (YCC), targeting 0% for 10-year government bonds – unique among major central banks. Under Governor Kuroda (2013-2023), the BOJ pursued aggressive easing, expanding its balance sheet to over 130% of GDP, far exceeding other central banks. The BOJ owns over 50% of Japanese government bonds and is a major ETF holder, raising concerns about market distortion. Despite massive stimulus, Japan struggled with deflation for decades, though inflation finally exceeded 2% in 2022-2023. The BOJ’s experiences provide lessons about monetary policy limits.