Japan Monetary Base Posts Sharpest Fall Since 2007

Japan’s monetary base contracted by 15.7% year-on-year in August 2026, marking the sharpest decline since March 2007 and exceeding market estimates for a 13.5% decline.

The latest reading also accelerated from a 13.8% decline in July, driven by a 18.9% drop in current account balances held at the Bank of Japan, following a 16.6% fall in July, while banknotes in circulation fell 2.0% (1.9%) and coins in circulation eased 1.2% (1.1%).

On an average outstanding basis, the monetary base stood at ¥543.0 trillion in August, down from ¥554.9 trillion in July.