On Saturday Mr. Toshihiko Fukui completed his first year as governor of the Bank of Japan. His policy so far has followed basically the same line as that of his predecessor, Mr. Masaru Hayami. Still, he has made a difference in style: He has acted swiftly, and sometimes boldly, under his own initiative, rather than wait for cues from the government and the financial markets. In other words, he has shown himself to be an aggressive central banker.
Barely a week after taking office, Mr. Fukui announced that the BOJ would increase its share purchases from private banks by 1 trillion yen to 3 trillion yen, sending a strong message to markets here and abroad that he was determined to prevent a credit crisis. Over the past year, he has also raised the target for reserves -- cash that lenders deposit with the central bank -- by 50 percent to a record 35 trillion yen.
Moreover, in an unprecedented move to ease the "credit crunch" in the small-business sector, Mr. Fukui decided to purchase asset-backed securities -- a step normally considered taboo for central banks because it risks undermining their financial integrity. Nevertheless, the decision conveyed a sense of confidence to markets, creating a perception that the BOJ was dead serious about reviving a stagnant banking system.