From multiple note issuers to a central bank
Early Meiji Japan combined government paper with notes issued by privately owned national banks, whose name referred to their chartering system. Financing the Satsuma Rebellion in 1877 expanded inconvertible currency and intensified concern about depreciation and inflation.
The June 1882 legislation provided capital of ten million yen and an initial thirty-year operating term. Business began on 10 October. The bank's establishment accompanied Matsukata Masayoshi's financial reforms, but its opening preceded the first issue of its own banknotes by more than two years.
Banknotes, convertibility and financial crisis
The first Bank of Japan notes, issued in May 1885, were silver-convertible ten-yen notes. Older government and national-bank notes remained during the transition, losing currency status at the end of 1899. Gold convertibility followed the adoption of the gold standard in 1897.
During the 1927 financial panic, the bank supplied notes against runs, including emergency two-hundred-yen notes with unprinted backs. The government imposed a three-week moratorium. Gold conversion stopped in December 1931, preceding the development of a managed-currency system.
Statutory changes and governance
A new statute reorganized the bank on 1 May 1942 under wartime national-policy objectives. Postwar amendments established the Policy Board in 1949. Comprehensive revision in 1997 emphasized independence and transparency and took effect on 1 April 1998.
The bank is a statutory juridical person rather than a government agency or ordinary private corporation. Its responsibilities encompass banknote issuance, monetary control and smooth settlement among financial institutions. The Policy Board determines monetary guidelines and oversees operations, connecting price stability with the bank's wider financial-system responsibilities.