Japan's monetary base fell 13.8 percent in July, the steepest decline the Bank of Japan's own table prints, while banknotes in circulation were down 1.9 percent
Thirteen point eight percent. That is how much smaller Japan's monetary base was in July than it had been a year earlier, and no row anywhere on the table the Bank of Japan published on Tuesday morning shows a steeper fall.
The base averaged 554.9 trillion yen over the month, against 559.2 trillion in June. It stood at 557.6 trillion at the end of July.
The decline has been deepening for a year. The same table gives the annual figures as a rise of 1.0 percent in 2024 and a fall of 4.9 percent in 2025. Month by month the fall ran at 3.5 percent in June last year, reached 9.8 percent by December, and has been in double digits since February.
Cash is not the part that is going
The monetary base is banknotes, coins and the balances that commercial banks hold at the central bank. Those three lines moved very differently in July.
Banknotes in circulation fell 1.9 percent on the year, to an average of 115.0 trillion yen. Coins fell 1.1 percent. Current account balances at the Bank fell 16.6 percent, to an average of 435.3 trillion yen, and reserve balances within them fell 15.3 percent.
On the published averages, current account balances are about 78 percent of the base and banknotes about 21 percent, which is arithmetic on the Bank's own levels rather than a figure it prints. A 16.6 percent fall in the larger line is what takes the headline to 13.8.
One number points the other way
The table also carries a seasonally adjusted rate of change from the previous month, stated at an annual rate. In June that read 22.9 percent down. In July it read 8.7 percent down.
So the year-on-year measure hit its steepest reading in the same month that the month-on-month pace slowed by more than half. Both are printed side by side in the release.
The Bank of Japan held its policy rate at 1 percent on 31 July. The file published on Tuesday says nothing about that, or about anything else. It is a statistical table with no accompanying text beyond a contact number for the financial statistics group.
