Japan’s currency balance is hitting a new high as c.bank supports the economy

TOKYO, Jan. 5 (Reuters) – The rest of the circulating currency in Japan’s economy peaked for the ninth consecutive month in December, data showed Tuesday, while the central bank continued to flood the economy with money to reduce the impact from the lump. Covid19 pandemic.

With control measures expected to be implemented so that the outbreak is seen to be hurting the economy, the Bank of Japan (BOJ) is likely to maintain its major aid programs for homes and businesses hit by the crisis health, analysts said.

The average balance of cash base, or the amount of cash in circulation and investments at the BOJ, rose 18.3% in December from the same month a year earlier to 606.5 trillion yen ($ 5.88 trillion), the fastest annual gain as of May 2017, central bank data showed.

The rise was largely driven by a rise in the BOJ’s purchase of short-term securities, a sign that the central bank was raising money for print to support a weak economy.

Investments of financial institutions parked at the BOJ also rose 22% to 485.5 trillion yen higher in December, the data showed.

The BOJ relaxed monetary policy twice last year to reduce the economic pain of the pandemic, such as by creating a new loan scheme and encouraging the purchase of corporate debt.

With pandemics seen widening the battle to reach their 2% inflation target, the central bank announced last month a plan to revise its policy framework to make it more sustainable .

The government said Monday it was considering a state of emergency in and around Tokyo as modern coronavirus cases escalate, casting doubt on the BOJ’s view that the economy will continue to recover. to moderate improvement later this year.

Markets will focus on how the tighter loops of economic activity could affect new growth and BOJ price forecasts, to be paid at its next flat rate review on January 20-21.