Friday May 29

Today we had a lecture on the Japanese economy and financial system. The professor formally worked at the bank of Japan. She taught us about the history of the Japanese economy since WWII and how it is experience a significant decrease in growth this year due to the global recession. The government is trying to stimulate the economy just like the U.S. government is currently doing. The Japanese government is issuing over $1 trillion in bonds this year to make up for their deficit. I am not sure how Japan will come out of this because they are spending almost as much as the U.S. yet their population is much smaller and is only getting older. She also talked about the booming economy of the 80’s and how the bubble burst and sent land prices way down and created a credit crunch. The post office which has about $2 trillion in assets was recently privatized to help reduce the cost to the government. It is much more than a mail delivery system; they have a bank and insurance group.
In the afternoon we went to visit the Bank of Japan (pictured). I did not really know exactly what their role was before I came here but we learned all about it on our visit. They are the only group in the country that can produce and distribute new currency. They make sure there is financial stability at banks and is an intermediary to send funds to different banks. They also create a monetary policy to keep the yen’s exchange rate within a target zone. They are not affiliated with the government which surprised me. They do work with the government but they have their own board that decides certain policies to implement. We saw the old vault where they used to keep money and other valuables. The door was over three feet thick, it was huge. After our tour we were given a lecture by one of the directors there about their policies.
After visiting the bank I was told by one of the students who went last year that I should check out the Mandarin hotel in the area. A group of us went to see it and it was pretty impressive. It was on the 37th and other upper floors of a building and had a very modern design. We decided to get drinks and I got a Lychee Saketini which was pretty good and had a very different flavor. We had a good time but it was very expensive so we only got a drink each.