Japan Monetary Base Grows 23 Percent Year over Year

Japan’s monetary base jumped 23.1 percent in April from a year earlier to 149.60 trillion yen, marking a record high for two months in a row, with the Bank of Japan having eased monetary policy to fight deflation, the central bank said Thursday.

The average daily balance of liquidity provided by the BOJ — consisting of cash in circulation and the balance of current account deposit held by commercial financial institutions at the bank — expanded for the 12th straight month.

The country’s monetary base at the end of April stood at 155.28 trillion yen, the highest level ever, the BOJ said.

The balance of current account deposits, or the sum of funds the institutions can use freely, increased 70.6 percent to 61.94 trillion yen, with the BOJ injecting more liquidity into the banking system by buying a large amount of financial assets from banks.

The central bank said April 4 that it set the monetary base as the main target for its monetary policy, instead of the overnight call rate, to clarify the bank’s policy of pursuing “quantitative and qualitative monetary easing.”

The BOJ said it will double the monetary base within two years and for that purpose increase it at an annual pace of about 60 trillion to 70 trillion yen, aiming to conquer Japan’s nearly two decades of economic slump in which prices have fallen.

The monetary base is projected to rise to 200 trillion yen at the end of this year and to 270 trillion yen at the end of next year if the central bank conducts its monetary operations as planned.

via Mainichi

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