Annual Review 2008^*

August 28, 2008
Bank of Japan

• The Annual Review 2008 describes the organization of the Bank and gives an overview of its business operations, implementation of business operations and organizational management during fiscal 2007 (April 1, 2007-March 31, 2008), and the settlement of accounts for the fiscal year. The contents are listed below, divided into seven PDF files. The table of files is followed by the Governor's foreword.

Table : Annual Review 2008

Foreword by the Governor

On April 9, 2008, the Cabinet appointed me Governor of the Bank of Japan. My appointment has taken place during a period of increasing uncertainty regarding the outlook for the global economy, with the deceleration of the U.S. economy, disruptions in international financial markets, and the heightening of inflationary pressure against the background of the surge in prices of international commodities such as crude oil. It is a tense time, but I am fully determined to contribute to the sound development of Japan's economy through the achievement of long-term price and economic stability, ensuring both that monetary policy is conducted based on the accurate assessment of economic conditions and that the Bank executes its central banking functions effectively.

In order to fulfill the two core purposes of the Bank, namely to maintain price stability and to ensure the stability of the financial system, the Bank conducts -- in addition to monetary policy and financial system policy -- various business operations, that is, it provides a whole range of central banking services in the following areas: payment and settlement systems and market infrastructure; the issuance, circulation, and maintenance of banknotes; treasury funds and Japanese government securities; transactions with the government; international operations; and research and statistics. TheAnnual Review is based on the Japanese original of theGyoumu Gaikyo Sho (Outline of Business Operations), which is prepared pursuant to Article 55 of the Bank of Japan Act. The Japanese original and theAnnual Review 2008 have been drawn up and released to enable readers to gain a better overall understanding of the Bank's business operations during fiscal 2007.

In fiscal 2005, the Bank released the"Medium-Term Strategic Framework for Fiscal 2005-2009" (MTSF), which laid out a five-year plan detailing issues to be addressed related to its business operations and organizational management, and announced that it would assess its progress every fiscal year. The MTSF stated two core principles, namely,"to pursue more advanced services" and"to ensure well-disciplined management," and identified major issues pursuant to these principles. Fiscal 2007 was the third year of the MTSF, and the Bank's progress in implementing measures to enhance its provision of central banking services was broadly according to schedule. The Bank also worked"to ensure well-disciplined management," by further raising the efficiency with which it uses management resources and intensifying efforts to execute its business operations with fairness and precision. I hope that theAnnual Review will help readers appreciate the Bank's efforts in these regards in fiscal 2007.

The format and style of theAnnual Review have been revised for this issue, while the contents have also been updated to make them easier to follow. Chapters I and II describe the organization of the Bank and provide an overview of its business operations. In Chapters III and IV, the Bank's implementation of business operations and organizational management during fiscal 2007 are explained in relation to the Bank of Japan's Action Plans for Fiscal 2007, which detail the major issues faced by the Bank in fiscal 2007 as well as the action plans to tackle them. Lastly, Chapter V provides the Bank's settlement of accounts for fiscal 2007, reflecting the Bank's activities during the fiscal year.

We are pleased to present this new more accessibleAnnual Review , which we hope will reach a wider readership and facilitate understanding of the work that we do here at the Bank.

Masaaki Shirakawa
Governor of the Bank of Japan