Japan's monetary base rose 25.1 percent from a year earlier to 86.08 trillion yen in July, marking the 18th consecutive month of expansion, the Bank of Japan said in a report released Friday.
The monetary base -- cash in circulation plus money in current accounts held by banks at the central bank -- rose 27.6 percent in June.
Growth in the monetary base has accelerated since March 2001, when the BOJ adopted "quantitative" monetary easing, pumping up the money supply in a bid to turn around the faltering economy and overcome deflation.
The fast pace of growth in the monetary base reflects the central bank's aggressive move to inject funds into the banking system to beat prolonged deflation in Japan.
The balance of banks' current accounts at the BOJ jumped 193 percent in July to 14.95 trillion yen. The balance rose 196 percent in June.
The BOJ has maintained a policy of flexibly providing funds regardless of its target of between 10 trillion yen and 15 trillion yen for current account deposits held at the BOJ by commercial banks.