The outstanding balance of coins in circulation fell slightly in March from a year earlier for the first year-on-year decline since the Bank of Japan started its survey in 1971, according to a report released Tuesday that prompted speculation the spread of electronic money has eaten into the use of hard currency.
The balance of circulating coins inched down 0.04 percent to 4.45 trillion yen in the reporting month, the BOJ report says.
Electronic cash cards and mobile phones with cash-card functionality are increasingly being used to make small purchases at convenience stores and train stations.
As for the monetary base, the report shows the base shrank 1.0 percent in March compared with a year ago for the first time in 62 months.
The average daily balance of the monetary base — cash in circulation plus current-account deposits held at the central bank by financial institutions and Japan Post — fell to 109.28 trillion yen in the reporting month, the BOJ said.
The monetary base last fell in January 2001, by 5.6 percent.
It shrank after the BOJ lifted its five-year-old quantitative monetary-easing policy on March 9. The policy was being used to flood the financial system with liquidity to keep interest rates close to zero to fight deflation.
The outstanding balance of BOJ notes in circulation rose 1.5 percent to 74.39 trillion yen.
The balance of current-account deposits at the central bank — the sum of financial institutions’ funds on hand that can be used freely — plunged 6.5 percent from a year before to 30.44 trillion yen.
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