Japan’s most closely watched money supply gauge rose 3.3 percent in October from a year earlier, but the balance of quasi-money — mostly in time deposits — fell 12.7 percent, the Bank of Japan said Monday.

The average daily balance of M2 — cash in circulation, demand deposits and quasi-money — plus certificates of deposit, came to 669.4 trillion yen, compared with a revised 668.4 trillion yen in September. , the central bank said.

The balance of quasi-money totaled 319.3 trillion yen, following a 13.1 percent drop in September. It fell by a record 13.8 percent in June.

Quasi-money refers to time deposits and other types of savings at banks that cannot immediately be cashed.

The balance of time deposits has been steadily falling, in step with a surge in the balance of demand deposits, since before the government on April 1 imposed a 10 million yen cap on the per-depositor guarantee for time deposits in the event of bank failures. Many companies and individuals have shifted money from time deposits into demand deposit accounts.

The balance of M2 plus certificates of deposit — held principally by corporations, individuals and local governments — has a close correlation to changes in economic activity.

A breakdown of the data shows that cash in circulation rose 11.9 percent to 64.4 trillion yen in October, compared with a revised 11.9 percent gain in September, while demand deposits — ordinary deposits and checking accounts — climbed 34 percent to 262.8 trillion yen, following a revised 34.9 percent rise in September.

The balance of M1 — cash in circulation plus demand deposits — climbed 29 percent to 327.2 trillion yen, following a 29.7 percent rise in September.

The balance of certificates of deposit slipped 19.8 percent to 22.9 trillion yen, following a revised drop of 20.6 percent in September.

Broadly defined liquidity, the widest measure of the money supply, rose 1.7 percent to 1.3221 quadrillion yen in October, following a revised 1.6 percent increase in September.

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 certificates of deposit.

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