— Japan Dec M3 Money Stock +1.8% Y/Y, Lowest Rise Since June 2009

TOKYO (MNI) – Japan’s money stock growth, measured by the key M2
aggregate, rose 2.3% from a year earlier in December, decelerating from
an unrevised 2.6% rate in November and marking the slowest rate of
growth since +2.2% in March 2009, the Bank of Japan said Wednesday.

Money stock growth had accelerated in the March-May period,
reaching a recent peak of 3.1% in May, but remained below the record
rise of +3.4% marked in October 2009.

Japan’s M3 money stock aggregate rose 1.8% y/y, also slowing from
an unrevised 2.0% rise in November and posting the slowest rate of
growth since +1.7% in June 2009.

Like M2, M3 growth peaked in May — at 2.3% — and has decelerated
since.

The December M2 growth came in slightly lower than the consensus
call of a 2.7% rise. The M3 figure was also weaker than the average
economist forecast for 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 — fell 0.1% in December from a year earlier,
slowing from the 0.1% rise in November.

The narrow measure of money supply, M1, which consists of currency
in circulation and deposit money, rose 3.0% on year in December, after
rising 2.8% in the previous month.

Certificates of deposit were up 20.4% in December, after rising a
revised 25.3% (preliminary +25.2%) in November.

tokyo@marketnews.com
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