— Japan Apr M3 Money Stock +2.2% Y/Y Vs Mar +2.0%

TOKYO (MNI) – Japan’s money stock, measured by the key M2
aggregate, rose 2.9% from a year earlier in April, accelerating from a
revised +2.7% (preliminary +2.6%) in March but was still below a record
rise of +3.4% in October 2009, the Bank of Japan said on Thursday.

The April rise was the highest since +3.0% marked in January this
year.

The 3.4% rise in October 2009 was the highest M2 growth rate under
the “money stock” data formula adopted last year and was also higher
than the record 3.2% rise marked in November 2002 under the “money
supply” series, historical data showed.

Japan’s M3 money stock aggregate rose 2.2% from a year earlier in
April after rising 2.0% in March. It hit a record growth of +2.4% in
October and November 2009.

The 2.4% rise was the highest growth under the new formula and also
surpassed the record 2.1% rise in M3 hit in May 2000 under the previous
one.

The April M2 growth was higher than the consensus call of a 2.5%
rise and the M3 figure was also higher than the average economist
forecast of a 1.9% 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 2.0% in April from a year earlier after an
unrevised 2.3% rise in March.

The narrow measure of money supply, M1, which consists of currency
in circulation and deposit money, rose 1.6% on year in April, after
rising a revised 1.1% in the previous month.

Certificates of deposit were up 18.3% in April, compared with a
revised 14.7% rise in March.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4833 **

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