Annual Review 2010 ^*

August 27, 2010
Bank of Japan

• The Annual Review 2010 provides an overview of the Bank of Japan's organization and business operations, a review of its implementation of business operations and organizational management in fiscal 2009 (April 1, 2009 - March 31, 2010), and a description of 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 2010

Foreword by the Governor

In fiscal 2009, the global economy, after emerging from the sharp deterioration triggered by the financial crisis, was on a recovery trend from the spring that was particularly visible in emerging economies. Japan's economic conditions also stopped worsening in the first half of the fiscal year and continued to pick up thereafter, mainly due to the improvement in overseas economic conditions and to various policy measures. On the price front, a moderating trend in the pace of decline in consumer prices continued from fall 2009 onward.

The Bank of Japan implemented various policy measures to support the economy's steps toward recovery from the financial side. Measures to restore the proper functioning of financial markets, such as outright purchases of corporate bonds and CP, secured considerable improvement in financial conditions and could thus be allowed to expire before the end of the fiscal year. With regard to the conduct of monetary policy, the Bank implemented monetary easing measures vigorously. Specifically, while maintaining the policy interest rate at the lowest level in the world, it introduced a new funds-supplying operation to encourage a decline in longer-term interest rates.

During the fiscal year, the Bank implemented measures aimed at ensuring financial system stability, such as purchases of stocks held by banks. It worked to enhance the safety and efficiency of payment and settlement systems through, for example, the construction of the new Bank of Japan Financial Network System (BOJ-NET). The Bank also worked to enhance the market infrastructure so as to improve the functioning and efficiency of financial markets, as well as to promote international financial stability. The Bank supported economic and financial activities in Japan through, for example, the issuance, circulation, and maintenance of banknotes, as well as through operations related to treasury funds and Japanese government securities; it also improved its business continuity arrangements taking into account the outbreak of the H1N1 influenza virus. At the same time, the Bank worked to provide the public with a clear explanation of its efforts across these wide-ranging areas.

The Annual Review is based on the Japanese original of the Gyoumu Gaikyo Sho (Outline of Business Operations), which is prepared pursuant to Article 55 of the Bank of Japan Act. The Japanese original and the Annual Review 2010 have been drawn up and released to explain to readers the implementation of the Bank's business operations during fiscal 2009. I hope this year's Annual Review will enable readers to gain a better overall understanding of the Bank's efforts.

The Bank began in fiscal 2009 to implement the Strategic Priorities, which have a rolling three-year horizon, so as to respond more appropriately to changes in Japan's economic and financial environment. During the fiscal year, the Bank, in accordance with the Strategic Priorities, implemented various action plans and mostly achieved the anticipated results. The Bank will maintain 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