The most closely watched money supply gauge for fiscal 2003 rose 1.7 percent from the previous year, marking the third-lowest gain on record, the Bank of Japan said in a preliminary report Monday.
The average daily balance of M2 plus certificates of deposit came to 682.4 trillion yen for the just-ended year. M2 is cash in circulation, demand deposits and quasi-money.
The modest money supply increase apparently reflects weak corporate demand for funds as well as a cautious stance taken by banks in offering loans.
A breakdown of the data shows that the balance of M1 -- cash in circulation plus demand deposits -- grew 4.8 percent to 349 trillion yen. Of the M1, cash in circulation rose 4 percent, the third-smallest increase on record, to 67.5 trillion yen.
In March alone, the average daily balance of M2 plus CDs rose 1.9 percent from a year earlier to 686.9 trillion yen, up from a revised 682.9 trillion yen in February.
Of the tally, quasi-money, mostly in time deposits, fell 1.2 percent to 311.6 trillion yen, extending its falling streak to 52 months.
Quasi-money refers to time deposits and other types of savings at banks that cannot immediately be cashed, including foreign-currency deposits and nonresidents' yen deposits. It also decreased 1.2 percent in February.
The balance of cash in circulation rose 1.6 percent to 67.8 trillion yen in March, following a revised 2.4 percent increase in February, and that of demand deposits -- ordinary deposits and checking accounts -- gained 4.7 percent to 287.5 trillion yen after a revised 4.6 percent rise.
The M1 balance grew 4.1 percent to 355.3 trillion yen, following a revised 4.2 percent gain the previous month.