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This paper examines the unconventional monetary policies of the Bank of Japan from 2002 to 2019 with a focus on open market operations. We apply a principal component analysis to investigate the complexity of monetary policy. Our results identify four principal components that explain the variance of measures taken by the Bank of Japan and its operation of various facilities: asset purchase measures including Japanese Government Bonds (JGBs), Exchange-Traded Funds (ETFs), and Japanese Real Estate Investment Trusts (J-REITs), and three different liquidity supply measures. Complexity differs substantially among different governorships of Fukui, Shirakawa (most complex), and Kuroda. We derive some conclusions from the increased complexity with implications for the economy.

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Motivation and BackgroundDespite the global nature of finance, the institutions and business of finance have until today retained national features that are clearly discernible. These are so distinct and important that financial systems are in fact often considered a key element in the characterization of national systems of capitalism (Dore, 2000;Hall & Soskice, 2001). We should therefore expect that the digital transformation (DX) of finance, its speed, scope and outcome should also be strongly influenced by national contexts. This proposition provided the main motivation for publishing this edited volume. There are numerous publications about how digitalization is transforming, if not disrupting, the financial industry. However, many publications either imply a world void of institutions or presuppose that DX is naturally a global and therefore uniform phenomenon (see for example Hines, 2021;Tapscott & Tapscott, 2016;McMillan, 2014). We think this leaves out at least half of the story. To fully understand the actual implications of DX, one must look at national cases.We started our project on the future of finance in the digital age in 2019 by setting up a study group of experts from Japanese academia, research institutions, and industry. It was planned that the group would produce position papers on issues related to DX and finance, and that these papers would be presented and discussed at a joint workshop with experts from the Deutsche Bundesbank and the European Central Bank in Frankfurt in 2020. The idea was to identify similarities and differences in the discourses about DX with regard to finance and the transformation apparent in Japan and the euro zone. The choice of countries was for the most part due to the fact, that the editors do research on Japan at an institute in Tokyo funded by the German government. That said, it perfectly served our motivation sketched above because