An advisory body to the finance minister Feb. 6 proposed sweeping changes to the decades-old Bank of Japan Law that would give the central bank more autonomy in policymaking.
The Financial System Research Council, which set up a subcommittee in November to debate rewriting the law, made its recommendations in a final report. "While I'd like to leave it up to future generations to evaluate our work, I personally think we did a fairly good job given the limited time we had," said Ryuichiro Tachi, head of the council and a professor emeritus at the University of Tokyo.
As a key step toward ensuring BOJ autonomy, the panel agreed the central bank's Policy Board needs to be galvanized to increase policymaking autonomy and transparency. The proposed revisions would strip the finance minister of wide-ranging powers to give orders to the bank concerning its operations and would restrict the minister's authority to call for probes of possible wrongdoing by the BOJ.