Japan’s monetary base plunged 15.3 percent in May from a year earlier, its biggest ever year-on-year decline due to a sharp fall in current account deposits at the Bank of Japan, the central bank said Friday.
The average daily balance of the monetary base — cash in circulation plus current account deposits held at the central bank by financial institutions, including Japan Post — fell to 94.195 trillion yen in the reporting month, the BOJ said.
The 15.3 percent fall is the biggest since January 1971, when comparative data first became available.
The current-account deposits — financial institutions’ funds on hand that can be used freely — plummeted 53.7 percent to 15.167 trillion yen.
The sharp fall in the current account deposit balance comes in the wake of the BOJ’s decision to end its five-year-old “quantitative easing” policy on March 9.
Under that policy, the central bank maintained current account deposits in a range of 30 trillion yen to 35 trillion yen.
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