Japan’s broad money growth held steady in September, the Bank of Japan said on Wednesday. The M2 money stock rose 2.0 percent from a year earlier to 1,295.6 trillion yen, unchanged from August’s pace and just below expectations for a 2.1 percent rise. M3 rose 1.2 percent to 1,638.3 trillion yen, M1 slipped 0.2 percent to 1,081.9 trillion yen, and the broadest L aggregate rose 4.3 percent to 2,344.3 trillion yen, easing from 4.4 percent a month earlier.
The release is a background series, not a policy trigger, but its shape is consistent with the rest of Japan’s tightening picture. The monetary base contracted 15.2 percent year on year in September, the 14th straight monthly decline, as the BoJ’s balance sheet normalisation drains current account balances, while deposit based money grows only slowly. Quantity and price are moving in the same direction: the 5-year JGB auction the same morning cleared at 2.379 percent on average.
Household expectations remain the politically sensitive number in the background. In the BoJ survey covered on Tuesday, 88.6 percent of households expected prices to rise over the coming year and 86.5 percent expected rises over five years.
None of this changes the October 29 to 30 decision by itself. It does mean the BoJ meets against money and credit data that show normalisation already transmitting, which supports a measured pace rather than a hurried one, unless the yen or expectations move first.