The Bank of Japan

The equivalent of these banking institutions in the other major financial market, Japan, is called the Bank of Japan.

Whilst the Fed is very independent the bank of japan has a much closer relationship with the government of Japan as the government has representatives on the key committees of the bank of japan.

Apart from that there are many similarities between the two systems as necessitated for the markets to function in a similar way.

For instance, there is a rate called the UC or uncollateralised overnight call rate - this can be thought of the equivalent of the Federal funds rate in the US and is the key indicator of policy objective of the bank of japan.

There is also the Official Discount Rate called the ODR.

It also has the power to require that the reserve requirements of the Banks are altered in Japan, these are set on a monthly basis, and also has a little moral influence over the markets to ensure that their requirements are met.

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