Bank of Japan (BOJ)

The Bank of Japan, or BOJ, is Japan's central bank, founded in 1882. It issues the yen, the third most traded currency in the world, and over the past three decades has run the most experimental monetary policy of any major central bank, pioneering quantitative easing in 2001 and negative interest rates in 2016.

Why it matters

The BOJ is the laboratory where the limits of monetary stimulus have been tested in public. After Japan's 1990 asset bubble burst, the bank cut rates to zero, then bought government bonds, corporate debt, and equity ETFs until its balance sheet exceeded the size of Japan's entire economy. Under yield curve control from 2016 it pinned 10-year bond yields near zero for eight years. The era of negative rates ended only in March 2024, when the BOJ hiked for the first time in 17 years.

Because Japan ran these policies first, economists study the BOJ for previews of what prolonged low rates and massive balance sheets do to growth, banks, and currencies.

In the gold vs bitcoin debate

The BOJ features in both pitchbooks. Gold priced in yen has set repeated record highs as the currency weakened, rewarding Japanese savers who held metal instead of deposits earning nothing. Bitcoin advocates cite Japan as proof that even a sophisticated, wealthy nation can spend decades unable to normalize its money, and note that Japan was among the first countries to formally recognize bitcoin as legal payment property in 2017. When the anchor currency of a G7 economy yields zero for a generation, scarce assets become the counterargument.