Toshihiko Fukui

Toshihiko Fukui’s road to leadership has been bumpy, but on March 20, 2003 he took over the reins of the Bank of Japan from Masaru Hayami. Born in the commercial city of Osaka to an umbrella exporter, Mr. Fukui followed the ‘traditional’ path early in his career. He received a prestigious law degree from the University of Tokyo and eventually joined the Bank in 1958. He served in many different positions before being appointed a deputy governor in 1994.

In fact, he was so successful that he was nicknamed ‘the prince’, implying that he was the heir to the throne of the bank. Unfortunately, in 1998 a scandal involving one of his underlings at the bank surfaced and he was forced to resign as a sign of taking responsibility even though he was not directly involved. After leaving the bank, he became the Vice Chairman of the Keizai Doyukai (the Japan Association of Corporate Executives) and served on the Board of Directors of several large companies. Just five years after leaving the bank he returned and was anointed the leader of one of the world’s largest economies.

The Bank is comprised of a policy board, bank executives, and 15 other various departments. The policy board is the highest decision-making body. Headed by the governor, currently Toshihiko Fukui, and eight deputy governors, the policy board “determines the guidelines for currency and monetary control, sets the basic principles for carrying out the bank’s operations, and oversees the fulfillment of the duties of bank executives, excluding Executive Auditors and Counselors.”

The Bank’s monetary policy is aimed at monitoring price stability and money market operations, and holding Monetary Policy Meetings (MPM) once or twice a month for one or two days. Through money market operations, the Bank alters the amount of funds in the money market, ultimately influencing interest rates in other financial markets. Monetary policy decisions must be passed through a majority vote of the nine members of the policy board during MPMs.

The Bank focuses on stability for financial systems by examining on and off-site financial institutions, acting as a lender in a time of crises, supporting private-sector initiatives, and collaborating with other foreign central banks to prevent the outbreak of international financial crises.

As per international finance, the Bank conducts operations with foreign monetary authorities and international organizations to assist with yen-denominated investments. The international department runs the Center for Monetary Cooperation in Asia (CeMCoA) to further promote monetary cooperation in Asia. Finally the Bank carries out international operations on behalf of the government, such as processing notifications and reports, compiling Japan’s Balance of Payments statistics, and carrying out foreign exchange intervention.

Domestic services relating to the government provided by the Bank include treasury funds and Japanese Government Securities (JGS) services. The Bank accepts deposits from the government as government deposits and issues, registers, and makes payment of principal and interest on JGSs.

By law, the Bank is required to inform most of its policy board decisions to the public in a timely fashion. The Bank must release the minutes and transcripts of MPMs, report to the Diet (Japan’s legislature), and make a formal public announcement regarding the Gyoumu Gaikyo Sho, or the Outline of Business Operations.

With over 32 branches (quite a few overseas), the Bank of Japan holds a high status in a country that values respect and innovation. The main headquarters is located in Tokyo, where it sits on a historical throne. It was established as a result of the Bank of Japan Act of 1882, and is run by a group of individuals known as "The Policy Board."As a "central" bank, if is more interested in the position of Japanese currency than anything else.
The Bank of Japan has to hold both foreign exchange reserves(through the issuing of government bonds) and gold reserves, in order that their currency is traded effectively. It also oversees the exchange rates, managing some while allowing others to free float (change with the market). Still other exchange rates are influenced on a small level, bringing a cross between a managed/free rate, which is sometimes called a "dirty float."

The chief of the bank has considerable influence on the economic policy of the Japanese government. Toshihiko Fukui replaced Masaru Hayami as the governor of the Bank of Japan since March 2003.