Japans Cash Balance Surges by a Fifth to Record in March

0
80

TOKYO, April 2 (Reuters) – The amount of money circulating in Japan soared by a fifth to hit a record in March as central bank pumped out cash to cushion blows to the economy from the COVID-19 pandemic.

The average balance of monetary base, or the amount of cash in circulation and deposits at the BOJ, rose 20.8% in March from a year earlier to 613.4 trillion yen ($5.5 trillion), marking the fastest annual gain since February 2017, central bank data showed on Friday.


The increase was driven largely by a surge in the BOJ’s purchases of short-term securities and demand for its loan scheme aimed at channelling funds to COVID-hit firms.


Financial institutions’ deposits parked at the BOJ also soared, climbing 25.1% to a record 492.5 trillion yen.


Many analysts expect the BOJ to keep its money spigot wide open as Governor Haruhiko Kuroda has stressed its near-term focus would be to support the pandemic-hit economy.


Japan’s economy is gradually recovering from pandemic-induced pain thanks to robust exports, though a slow vaccine rollout and climbing coronavirus infections, particularly in the city of Osaka, cloud the outlook.


Critics have urged the BOJ to focus more on the rising costs of its prolonged easy monetary policy, such as the damage done by ultra-low interest rates to bank profits.


The central bank decided last month to address the side-effects of its prolonged monetary easing with a review of its tools, which have led to plans to trim its bond purchases from April.


$1 = 110.6500 yen


Reporting by Leika Kihara and Takahiko Wada; Editing by Edwina Gibbs




Source: Reuters

LEAVE A REPLY

Please enter your comment!
Please enter your name here