June 11, 2019

Money Supply

Money Supply slowing across all measures.

Published monthly by Bank of Japan (BoJ) the monetary base is updated to May 2019 (Published on June 4, 2019) and the money stock is updated to May 2019 (Published on June 10, 2019).

Brief Overview of Money Supply

The money supply statistic represents the total stock of currency (cash, coins) and the other liquid instruments (bank deposits, government securities) in an economy at a point in time. There are four measures of money supply used by the Bank of Japan which includes M1, M2, M3, and Broadly defined liquidity (L).

For exact definitions and coverage of these measures of money supply, please visit the official government page.  Bank of Japan (BoJ) publishes the money supply statistics on a monthly basis.

Since the 1990s, Japan has faced a deflationary problem which persists till today. The Bank of Japan has been criticised for underestimating the gravity of the problem. BoJ has been trying to reflate the economy by lowering interest rates, adopting the zero interest rate policy in 1999 and then quantitative easing (QE) policy in 2001. In 2010, BoJ expanded its QE to include the purchase of ETF and corporate bonds. In 2013, governor Kuroda massively expanded the QE program and again in late 2014. In early 2016, he went further in adopting a negative interest rate policy (NIRP). However, all these monetary expansions have failed to bring about sustained inflation in Japan.

Japan-US Monetary Base Ratio (Soros Chart)

Published monthly by the Bank of Japan (BoJ)  updated to May 2019.

The ratio of Japan-US monetary base, also known as Soros chart, is used to assess the impact of the Quantitative extension/expansion on the USD/JPY exchange rate. The theoretical foundation for the relationship between monetary base and exchange rate is weak, but the chart maintains persistent popularity among financial market practitioners. 

The Next Release Date:    July 2nd, 2019 (Monetary Base for June)

                                      

                                    
                                    

Suggested Pages

Exchange Rates

In May 2019, the average exchange rate of USD/JPY was 109.76, virtually unchanged from the average of 111.63 in April 2019.The Real Effective Exchange Rate (REER) of Yen in April was 74.36 (2010=100)

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Japan Bank lending

Japan''s bank credit is showing a steady expansion at around 2.4% year on year. Regional banks are more active in their credit provision, growing their loan books at 2.9% year on year (YoY) in April 2

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Interest Rates

In May 2019, Japanese 10-year JGB interest rates was -0.057% on average.

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Bank of Japan balance sheet

As of May 31 2019, the Bank of Japan held a total of 567.2 trillion yen in assets. Its JGB holding was 468.9 trillion yen, up by 29 trillion yen from May 31 2018.

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