September 11, 2018

Money Supply

Japan's monetary base growth at nearly six year low.

Published monthly by Bank of Japan (BoJ) the monetary base is updated to August 2018 (Published on September 7, 2018) and the money stock is updated to August 2018 (Published on September 11, 2018).

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.

Published monthly by the Bank of Japan (BoJ)  updated to July 2018.

Japan-US Monetary Base Ratio (Soros Chart)

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:  October 2, 2018 (Monetary Base for September)

                                    October 12, 2018 (Money Stock for September)

                                    
                                    

Suggested Pages

Exchange Rates

In August 2018, the average exchange rate of USD/JPY was 110.81, virtually unchanged from the average of 111.41 in July 2018.The Real Effective Exchange Rate (REER) of Yen in July was 75.09 (2010=100

View Page

Japan Bank lending

Japan''s bank credit is showing a steady expansion at around 2.2% year on year. Regional banks are more active in their credit provision, growing their loan books at 3.5% year on year (YoY) in August.

View Page

Interest Rates

In August 2018, Japanese 10-year JGB interest rates was 0.106% on average.

View Page

Bank of Japan balance sheet

As of September 10 2018, the Bank of Japan held a total of 551.7 trillion yen in assets. Its JGB holding was 452.4 trillion yen, up by 44.8 trillion yen from September 2017.

View Page