(MENAFN) The Bank of Japan (BOJ) stated that in January, the country's monetary base rose by 10.9 percent from a year before to USD1.420 trillion, reported Xinhua News.
The central bank said that banknotes in circulation went up by 3.2 percent in the period, whereas coins in circulation gained 0.6 percent.
The monetary base, which is an official gauge of the Japanese money supply, refers to the amount of currency either circulated in the hands of people living in the country or in domestic commercial bank deposits held in the central bank's reserves.
It shows the instant impacts of monetary policy actions and can give an indication of the future direction of inflation.
According to the central bank, the monetary base rose 6.8 percent to USD1.386 trillion, on a seasonally adjusted basis in January, following a growth of 18.2 percent in December.
It is worth noting that an increase in the monetary base is normally inflationary, whereas a drop will likely have the opposite effect.