Japan's monetary base rises 5.5 pct on year in Jan.

13:17, February 02, 2011      

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The monetary base in Japan expanded 5.5 percent in January from a year earlier, rising for the 29th consecutive month from a 7.0 percent annual increase booked in the previous month, the Bank of Japan (BOJ) said in a report on Wednesday.

The rise in December, however, failed to meet median market expectations for a 7.6 percent increase, analysts noted.

The average daily balance of the monetary base stood at 103.48 trillion yen (1.27 trillion U.S. dollars), with the current account deposit balance leaping 24.5 percent on year, including a 19.9 percent increase in reserve balances, the central bank's report said.

This compares to the previous month's figures which showed the deposit balance expanded by 36.6 percent on year, with reserve balances growing 31.4 percent.

On a seasonally adjusted basis, the monetary base declined 9.9 percent on year to 101.08 trillion yen (1.24 trillion U.S. dollars) , the central bank said.

Banknotes in circulation were up 2.0 percent on year, although coins in circulation declined an annual 0.2 percent, in the recording period.

Japan's monetary base refers to the amount of currency that is either circulated in the hands of people living in Japan or in domestic commercial bank deposits held in the central bank's reserves.

This measure of the money supply typically only includes the most liquid currencies and the Japanese administration maintains a relatively high degree of control over the monetary base by buying and selling government bonds in the open market.

The central bank's recent easing of monetary policies has again facilitated the increase in Japan's monetary base in January, although the pace of increase has slowed from the previous month.

Source: Xinhua
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