Annual Review 2009 ^*

August 28, 2009
Bank of Japan

• The Annual Review 2009 describes the organization of the Bank and gives an overview of its business operations, implementation of business operations and organizational management during fiscal 2008 (April 1, 2008-March 31, 2009), 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 2009

Foreword by the Governor

In fiscal 2008, economic conditions around the world deteriorated simultaneously and sharply while turmoil in global financial markets intensified, following the failure of Lehman Brothers in the autumn. Japan's economy also deteriorated significantly against the background of a significant decline in exports, deterioration in both corporate profits and households' employment and income situation, and severe financial conditions.

In order to support the economy from the monetary policy side in this situation, the Bank of Japan implemented various measures from the autumn, which can be divided into three main areas: reductions in the policy interest rate; measures to ensure stability in financial markets; and measures to facilitate corporate financing. In addition, to secure the stability of the financial system, the Bank resumed its purchases of stocks held by banks, and also made the decision to provide subordinated loans to banks.

The Bank contributed to the enhancement of the safety and efficiency of payment and settlement systems by, for example, providing safe and convenient settlement assets. It also engaged in efforts to enhance the market infrastructure so as to improve the functioning and efficiency of financial markets, as well as working to promote international financial stability. The Bank supported economic and financial activities in Japan through its business operations in the following areas: the issuance, circulation, and maintenance of banknotes; treasury funds and Japanese government securities; and business continuity for emergency situations. Moreover, the Bank worked to keep the public informed about its efforts in all these areas.

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 2009 have been drawn up and released to explain to readers the implementation of the Bank's business operations during fiscal 2008. I hope this year'sAnnual Review will enable readers to gain a better overall understanding of the Bank's efforts.

The Bank introduced the new Strategic Priorities in April 2009 so that it would be able to respond more appropriately to changes in Japan's economic and financial environment. Under the new Strategic Priorities, the Bank will keep a medium-term perspective, and update the Strategic Priorities at the end of every fiscal year to respond to changes in circumstances in a flexible and timely manner, thereby continuing to contribute to the sustainable growth and development of Japan's economy.

Masaaki Shirakawa
Governor of the Bank of Japan