TOKYO: The amount of money circulating in Japan soared by a fifth to hit a record in March as central bank pumped out cash to cushion blows to the economy from the COVID-19 pandemic. The average balance of monetary base, or the amount of cash in circulation and deposits at the BoJ, rose 20.8% in March from a year earlier to 613.4 trillion yen ($5.5 trillion), marking the fastest annual gain since February 2017, central bank data showed on Friday.
The increase was driven largely by a surge in the BoJ’s purchases of short-term securities and demand for its loan scheme aimed at channelling funds to COVID-hit firms.
Financial institutions’ deposits parked at the BoJ also soared, climbing 25.1% to a record 492.5 trillion yen.
Many analysts expect the BoJ to keep its money spigot wide open as Governor Haruhiko Kuroda has stressed its near-term focus would be to support the pandemic-hit economy. Japan’s economy is gradually recovering from pandemic-induced pain thanks to robust exports, though a slow vaccine rollout and climbing coronavirus infections, particularly in the city of Osaka, cloud the outlook.
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