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QuestionWhat is the BOJ-NET?

Answer

The Bank of Japan Financial Network System (BOJ-NET) is a computer network operated by the Bank, which was established with the aim of efficiently and safely executing online funds transfers and Japanese government bond (JGB) settlements between the Bank and financial institutions that conduct transactions with the Bank.

The BOJ-NET connects the Bank's computer center with its Head Office and branches and the financial institutions participating in the network via communication circuits that allow data entered at the Bank's Head Office and branches or financial institutions to be processed online at the Bank's Computer Center. In addition to connections with terminals, direct connection with participating financial institutions' computers is possible.

The functions of the BOJ-NET can be divided into the BOJ-NET Funds Transfer System, which is the payment system, and the BOJ-NET JGB Services, which is the Japanese government securities (JGSs) settlement system. Of these functions, the BOJ-NET Funds Transfer System processes transactions in money markets and funds settlements related to JGS transactions by transferring funds between financial institutions' current account deposits at the Bank. The system also processes funds settlements related to private-sector payment and settlement systems, such as the Domestic Funds Transfer System, the bill and check clearing system, and the Foreign Exchange Yen Clearing System. The BOJ-NET JGB Services processes settlements for JGS transactions, as well as auction, issuance, and payments at the time of JGS issuance.

The environment surrounding the BOJ-NET has been changing dramatically, as seen, for example, in increased networking of settlement infrastructures, globalization of financial transactions, as well as changes in financial services and various transaction needs. As it eventually would become technologically difficult and costly to adapt to these changes while maintaining the system capability of the conventional BOJ-NET, the Bank built a new BOJ-NET, which began operations in two phases -- in January 2014 and October 2015. The main features of the new BOJ-NET are as follows: (1) use of the latest information technology; (2) high flexibility to adapt to changes; and (3) enhanced accessibility.

Furthermore, in February 2016, the Bank extended the operating hours of the BOJ-NET until 21:00, from 19:00. This enabled a longer overlap of the operating hours with international financial markets such as in Asia and Europe, and encouraged smoother cross-border settlement of the Japanese yen and JGBs.

The Bank expects the BOJ-NET to contribute to enhancement of financial services and user-friendliness of settlement systems, which lead to further development of financial markets in Japan. To this end, the Bank will continue to communicate with a wide range of relevant entities so that financial institutions can make effective use of the BOJ-NET.

Related Page

For the Bank's releases on the BOJ-NET, see Operation of BOJ-NET.

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