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Japan’s key gauge of money supply rose 3.4 percent in June from a year earlier, while the balance of quasi-money — most of it in time deposits — extended its decline to a record eight consecutive months, the Bank of Japan said Monday.

The average daily balance of M-2 — cash in circulation, demand deposits and quasi-money — plus certificates of deposit came to 669.7 trillion yen, compared with a revised 670.1 trillion yen in May, the central bank said.

The balance of quasi-money fell by a record 13.9 percent to 318.3 trillion yen, following a revised 13.5 percent decline in May.

Quasi-money refers to time deposits and other types of savings at banks that cannot be immediately cashed, including foreign-currency deposits and nonresidents’ yen deposits.

The balance of time deposits has been steadily falling, in step with a surge in the balance of demand deposits, since before the April 1 abolition of the government’s full-refund guarantee for time deposits in the event of bank failures.

The balance of M-2 plus certificates of deposit, held principally by corporations, individuals and local governments, is considered to have a close correlation to changes in economic activity.

A breakdown of the money-supply data shows that cash in circulation rose 12.4 percent to 63.5 trillion yen in June, compared with a revised 13.3 percent gain in May, while deposit money — demand-deposits and checking accounts — grew 37.8 percent to 268.2 trillion yen, following a revised 37 percent rise in May.

The balance of M-1 — cash in circulation plus deposit money — climbed 32.1 percent to 331.8 trillion yen, following a revised 31.7 percent rise in May.

The balance of certificates of deposit fell 26.8 percent to 19.6 trillion yen, following a revised drop of 28.8 percent in May.

Broadly defined liquidity, the widest measure of the money supply, rose 1.7 percent to 1.32 quadrillion yen in June, following a revised increase of 1.4 percent in May.

The gauge includes postal savings, deposits at agricultural and fisheries credit cooperatives, loan trusts and money trusts, bank debentures, and Japanese and foreign government bonds, as well as the M-2 balance plus certificates of deposit.

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