— Japan Oct M3 Money Stock +2.0% Y/Y Vs Sep Unrev +2.1%

TOKYO (MNI) – Japan’s money stock growth, measured by the key M2
aggregate, slowed to 2.7% y/y in October from 2.8% in both September and
August, the Bank of Japan said on Tuesday.

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. The 2.7% growth in October matched
the lowest rates of the year, as posted in July, March and February.

Japan’s M3 money stock aggregate rose 2.0% y/y, also slowing from
2.1% rise in each of the previous three months.

Like M2, M3 growth peaked in May — at 2.3% — and has decelerated
slightly since. The 2.0% matched the year’s lowest posted in February
and March.

The October M2 growth came in slightly lower than the consensus
call of a 2.8% rise. The M3 figure was also slightly weaker 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 0.3% in October from a year earlier,
slowing from the 0.7% rise in September.

The narrow measure of money supply, M1, which consists of currency
in circulation and deposit money, rose 2.9% on year in October, after
rising 2.3% in the previous month.

Certificates of deposit were up 25.5% in October, after rising a
revised 28.8% (preliminary +28.6%) in September.

tokyo@marketnews.com
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