Japan Monetary Base Declines for 14th Straight Month

Japan’s monetary base contracted by 15.2% year-on-year in September 2026, marking the 14th consecutive month of decline, although the pace eased from a 15.7% drop in August. The latest contraction was driven by an 18.3% fall in current account balances at the Bank of Japan, following an 18.9% decline in August, while banknotes in circulation fell 2.0% (2.0%) and coins in circulation eased 1.2% (1.2%). On an average outstanding basis, the monetary base stood at ¥532.8 trillion in September, down from ¥543.0 trillion in August.

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.