The purpose of this paper is to review the regulatory reforms and policy change in the regulation of banking business in Japan and find lessons for Korea. This paper organized as follows: In the second section, it briefly reviews the history of financial policy making and the results of it. The following two sections describes contents and status of Japan’s banking business regulation. The final section concludes As shown in papers, Japan’s banking regulation has been eased very moderately. However in 2004, the Financial Services Agency(FSA) initiated important revisions of Securities and Exchange Laws and then FSA introduced a measure through which bank may introduced their customers to securities companies by way of intermediation. In addition, in recent days, the Japan’s financial regulator is exploring ways to allow banks to invest in non-financial firms operated through subsidiaries so they can broaden their operations. With an eye on raising the global competitiveness of Japanese banks through deregulation, FSA announced their plan they are considering loosening rules so that banks can fully trade commodities and commodity futures. Also FSA was looking at the possibility of lifting a ban on banks’ involvement in greenhouse gas emissions trading, as well as letting them participate in the growing market for Islamic bonds. Besides, current Japan’s Banking Act allows banks and their subsidiaries to hold combined stockholdings of up to 5 per cent in non-financial firms, and bank holding firms can hold up to 15 per cent of the voting rights of such firms. The FSA’s plan includes a proposal to maintain the 5 per cent ceiling on non-financial stockholdings owned by parent banks, but it is scheduled to increase the percentage subsidiaries are allowed to hold if they meet certain requirements. This would enable banks to acquire majority voting rights in troubled firms to breathe new life into them, before taking them public and earning capital gains on the sale of their stock. In conclusion, bank powers in Japan are somewhat different compared with our’s banking activities. That is, with an eye on raising the global competitiveness of Japanese banks’expansion of their business, current Japan’s Banking Act is being revised continuously. This movement toward deregulation makes sense in light of demand for the strong competitiveness and gives some useful implication to us.