Japan May M2 Money Stock +3.1% Y/Y Vs Apr +2.9%

– Japan May M3 Money Stock +2.3% Y/Y Vs Apr +2.2%

TOKYO (MNI) – Japan’s money stock, measured by the key M2
aggregate, rose 3.1% from a year earlier in May, accelerating from +2.9%
in April but was still below a record rise of +3.4% marked in October
2009, the Bank of Japan said on Tuesday.

The 3.4% rise in October 2009 was the highest M2 growth rate under
the “money stock” data formula adopted last year and was also higher
than the record 3.2% rise marked in November 2002 under the “money
supply” series, historical data showed.

Japan’s M3 money stock aggregate rose 2.3% from a year earlier in
May after rising 2.2% in April. It hit a record growth of +2.4% in
October and November 2009.

The 2.4% rise was the highest growth under the new formula and also
surpassed the record 2.1% rise in M3 hit in May 2000 under the previous
one.

The May M2 growth came in higher than the consensus call of a 2.8%
rise and the M3 figure was also higher than the average economist
forecast of a 2.1% rise.

In June 2008, the BOJ changed its measures for money supply data in
lined with the privatization of Japan Post Bank Co. in October 2007.

The central bank has created the M3 category, which comprises M2
plus certificates of deposits and deposits at the postal bank, credit
unions and agricultural cooperatives among other lenders.

The BOJ now calls its main money supply measure simply M2,
replacing the previous M2 plus CDs designation.

The BOJ continues to focus on both M2 and M3 data to gauge economic
activity at the moment as the bank has no long-term historical data on
the M3 aggregate yet.

Quasi-money — cash equivalent and other assets that are easily
convertible into cash — rose 1.9% in May from a year earlier after an
unrevised 2.0% rise in April.

The narrow measure of money supply, M1, which consists of currency
in circulation and deposit money, rose 2.0% on year in May, after rising
an unrevised 1.6% in the previous month.

Certificates of deposit were up 19.6% in May, compared with a
revised 18.1% rise (preliminary +18.3%) in April.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4833 **

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