Annual Review 2011
August 26, 2011
Bank of Japan
The Annual Review 2011 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 2010 (April 1, 2010 - March 31, 2011), and a description of the settlement of accounts for the fiscal year.
Contents
- Foreword by the Governor
- About the Bank of Japan
- I. Core Purposes
- II. Capital
- III. The Bank's Officers
- IV. Organization
- The Bank's Business Operations
- I. Monetary Policy
- II. Financial System Policy
- III. Enhancement of Payment and Settlement Systems and Market Infrastructure
- IV. International Operations
- V. Issuance, Circulation, and Maintenance of Banknotes
- VI. Services Relating to the Government
- VII. Communication with the Public
- Implementation of the Bank's Strategic Priorities: Progress Made during Fiscal 2010
- I. Introduction
- II. The Bank's Response to the Great East Japan Earthquake
- III. The Bank's Progress in Addressing Issues and Implementing Action Plans in Fiscal 2010
- The Bank's Organizational Management in Fiscal 2010
- I. Settlement of Accounts and Budget for Expenses
- II. IT Investment
- III. Human Resources
- IV. Organizational Management Measures Implemented in Fiscal 2010
- V. Internal Audits
- The Bank's Accounts
- I. Settlement of Accounts for Fiscal 2010
- II. Settlement of Accounts for Expenses for Fiscal 2010
- Appendixes
- Appendix 1: Overview of Audits of the Bank of Japan
- Appendix 2: The Bank of Japan's Strategic Priorities for Fiscal 2011-2013
Foreword by the Governor
Looking back at fiscal 2010, Japan's economy remained on a moderate recovery path for the first half of the fiscal year mainly due to improvements in overseas economic conditions and to various policy measures. The pace of recovery slowed temporarily from the beginning of autumn reflecting, among other factors, the effects of a decline in demand for durable consumer goods following the sharp increase seen previously, but the economy began gradually to emerge from the deceleration phase from early 2011. The situation changed significantly with the Great East Japan Earthquake that struck on March 11, after which Japan's economy faced strong downward pressure, mainly on the production side.
Throughout the year, the Bank of Japan continued to consistently make its utmost contribution as the central bank in order for Japan's economy to overcome deflation and return to a sustainable growth path with price stability, through the three-pronged approach of pursuing powerful monetary easing via comprehensive monetary easing, ensuring financial market stability, and providing support to strengthen the foundations for economic growth.
To maintain the functioning of financial and settlement systems following the earthquake, the Bank exerted every possible effort to provide cash to disaster areas and to ensure the stable operation of payment and settlement systems. Also, with a view to ensuring financial market stability, the Bank provided ample funds sufficient to meet demand in the markets. Moreover, the Bank further strengthened monetary easing by increasing the amount of assets purchased through the Asset Purchase Program, mainly purchases of risk assets, by about 5 trillion yen. The Bank continued to take policy actions in fiscal 2011 including the introduction of the funds-supplying operation to support financial institutions in disaster areas.
During fiscal 2010, the Bank implemented measures aimed at ensuring financial system stability. It also worked steadily to enhance the safety and efficiency of Japan's payment and settlement systems through, for example, the construction of the new Bank of Japan Financial Network System (BOJ-NET). In addition, the Bank worked actively to enhance market infrastructure and 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. At the same time, it 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 2011 have been drawn up and released to explain to readers the implementation of the Bank's business operations during fiscal 2010. I hope this year's Annual Review will enable readers to gain a better overall understanding of the Bank's efforts.
The above business operations are conducted in line with the Bank's Strategic Priorities, which have a rolling three-year horizon. The Bank maintains a medium-term perspective and updates the Strategic Priorities at the end of every fiscal year to respond to changes in Japan's economic and financial environment in a flexible and timely manner. During fiscal 2010, the Bank, in accordance with the Strategic Priorities, implemented various action plans and mostly achieved the anticipated results. Given that there remains significant uncertainty regarding the effects of the earthquake, the Bank, with due regard for its Strategic Priorities, will continue to make efforts as the country's central bank toward the sustainable growth and development of Japan's economy.
Masaaki Shirakawa
Governor of the Bank of Japan