Japan's Monetary Base Rises 5% In November
By Bhaskar Prasad | December 4, 2012 3:13 PM EST
Japan's monetary base rose in November compared to that in the same month last year, indicating that the monetary easing policies are leading to an increase in the amount of currency in circulation which in turn results in reviving economic growth.
According to the data released Tuesday by the Bank of Japan, the country’s monetary base, which measures the change in the total amount of domestic currency in circulation and current account deposits held at the central bank, advanced 5 percent in November, down from a 10.8 percent rise in October and below the analysts’ expectation of 11.4 percent. An increase in the supply of money is expected to lead to additional spending, which in turn results in inflation.
This data come amid the reports that the policymakers in Japan were under pressure to further loosen the monetary policy to revive the economy. Last month, Japan faced a sudden development on the political scene with Prime Minister Yoshihiko Noda dissolving the Diet ahead of the general elections to be held Dec. 16. Investor confidence rose amid the hope that the main opposition, the Liberal Democratic Party, led by Shinzo Abe who is the proponent of aggressive monetary easing measures, would win the next elections.
“The Bank of Japan could also come under pressure to ease further, particularly from the government. However, financial conditions are already very accommodative and have arguably reached a state of saturation. As such, we doubt the Bank will expand its asset purchase program again this year but instead focus on growth-supporting measures such as the recent cheap loans scheme,” Capital Economics said in a note.
With Japan's gross domestic product contracting in the third quarter compared to that in the previous quarter, the policymakers are under pressure to further ease the monetary policy.
The data released last month by the Cabinet Office showed that the country’s GDP, which measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy, shrank to 0.9 percent in the quarter ending Sept. 30, down from a 0.1 percent rise in the previous three months.
Japan reported last week that retail sales fell in October compared to those in the same month last year, indicating a faltering of consumer spending, which accounts for the majority of overall economic activity. The data released by the Ministry of Economy, Trade and Industry shows that Japan’s retail sales, which measure the total value of inflation-adjusted sales at the retail level, fell 1.2 percent in October from those in the same month a year earlier, down from a 0.4 percent rise in September.
To contact the editor, e-mail:
Most Popular Slideshows
- 2014 MLB World Series Game 1: San Francisco Giants 7, Kansas City Royals 1 [PHOTOS]
- 2014 MLB World Series - Game 2: Kansas City Royals 7, San Francisco Giants 2 [PHOTOS]
- NFL Thursday Recap - Denver Broncos 35, San Diego Chargers 21: Peyton Manning Has 3 TDs In Easy Win [PHOTOS]
- 2014 MLB World Series Game 3: Kansas City Royals 3, San Francisco Giants 2 [PHOTOS]
Join the Conversation
- Australia's Low Birth Rate May Be Due to Low Confidence in Economy
- Fears Of Infection Spread Prompt Some US Hospitals To Refuse Ebola Patients
- Readers Slam a Book Showing That US Wealth And Power Rests on Slave Labour
- LG G Watch R To Be Available Globally Starting With Europe, North America And Asia Through Retail Sites And Play Store
- Young Teen Fighter Says ISIS Uses Drugs On Suicide Bombers To Get Them Perform The Act
- Xiaomi Redmi 1S vs. Sharp Aquos Crystal – Specifications, Features And Price Showdown
- Verizon Motorola Droid Turbo Leaked Live Images Surfaces, Scheduled To Get Unveiled On Oct 28
- Update HTC One M7 with LG G2 with Android 4.4.2 as Sprint OTA: Fixes and Installation
- U.S. Targets Buyers of ISIS Oil, Threatens Sanctions
- ISIS Syria Airstrike Bombing Has Killed 550 People, Civilians Included
- Russia Blocking OSCE Monitoring Of Its Border With Ukraine
- Russia Slams US 'Double Standards' In The Fight Against ISIS