Japan money supply up 2.7% in May, biggest rise in 6.5 years

TOKYO, June 8 Kyodo - Japan's key money supply gauge rose 2.7 percent in May from a year earlier,
marking the sharpest increase in six and a half years due partly to the
government's cash handout program, which boosted bank accounts, the Bank of
Japan said Monday.
The average daily balance of M2 came to 753.9 trillion yen. The 2.7 percent
increase was the largest gain since November 2002 when it rose 3.2 percent. The
headline reading also beat the average market forecast of a 2.6 percent
increase in a Kyodo News survey.
M2 consists of cash in circulation, demand and time deposits, and certificates
of deposit at domestic banks including Japanese branches of foreign banks.
The balance of demand deposits rose 0.7 percent to 414.8 trillion yen, marking
the sharpest increase since October 2006, while cash currency increased 1.1
percent to 72.8 trillion yen, the highest increase since January 2008.
M1, which refers to cash in circulation and demand deposits, rose 0.7 percent
to 487.6 trillion yen.
M3, a wider gauge that corresponds to M2 plus CDs at all depository
institutions, including Japan Post Bank, was up 1.8 percent to 1,052.1 trillion
yen.
Growth in the balance of quasi-money, which includes risk-free, higher-interest
time deposits, rose 2.7 percent to 541.6 trillion yen.
Broadly defined liquidity -- the widest money supply measure covering
everything from M3, pecuniary trusts and investment trusts to bank debentures,
straight bonds issued by banks and foreign bonds -- was up 0.1 percent to
1,430.2 trillion yen.
==Kyodo