Japan’s key money supply gauge rose 3.6 percent in April from a year earlier while the balance of quasimoney — most of it time deposits — saw a record drop in the wake of the April 1 abolition of the government’s full-refund guarantee, the Bank of Japan said Friday.
The average daily balance of M2 — cash in circulation, demand deposits and quasimoney — plus certificates of deposit came to 671.2 trillion yen, compared with a revised 663.1 trillion yen in March, the central bank said.
The pace of growth in the key money supply gauge for March was revised to 3.7 percent from the originally reported 3.8 percent.
The balance of quasimoney dropped by a record 12.8 percent to 320.6 trillion yen, following a revised record 8.5 percent decline in March. Quasimoney refers to time deposits and other types of savings at banks that cannot be immediately cashed, including foreign-currency deposits and nonresident yen deposits.
The balance of time deposits has been steadily falling, in step with a surge in the balance of demand deposits since shortly before the abolition of the government’s full deposit refund guarantee for time deposits in the event of bank failures.
Meanwhile, the April balance of M2 plus CDs, held principally by corporations, individuals and local governments, is considered to have a close correlation to changes in economic activity.
A breakdown of the index shows that cash in circulation increased 13.2 percent to 63.8 trillion yen, compared with a revised 12.3 percent gain in March.
The balance of M1, or cash in circulation plus money in demand-deposit and checking accounts, climbed 32.6 percent to 331.9 trillion yen, up from a revised 24.2 percent increase in the previous month.
The balance of CDs fell 37.7 percent to 18.7 trillion yen, following a revised drop of 9.7 percent in March.
Broadly defined liquidity, the widest measure of the money supply, rose 1.9 percent to 1.332 quadrillion yen in April, following a revised increase of 1.8 percent in March.
The gauge includes postal savings, deposits at agricultural and fishery credit cooperatives, loan trusts and money trusts, bank debentures, and Japanese and foreign government bonds, as well as the M2 balance plus CDs.
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