Japan's monetary base hits record high in January on continued easing measures

Japan's monetary base hit a record high at the end of January, standing at 358.76 trillion yen (around 2.95 trillion U.S. dollars), an increase of 28.8 percent from a year earlier, the Bank of Japan said Tuesday.

According to the central bank, the nation's monetary based peaked at a record high for the second successive month as the bank continues its quantitative easing measures, the most recent of which saw the bank apply a negative interest rate to current accounts held by financial institutions.

The biggest segment of the monetary base is the balance of financial institutions' current account deposits, which jumped 40.2 percent to 259.29 trillion yen in the recording period, the central bank said.

While surprising markets by saying it plans to introduce a negative interest rate from Feb. 16, as falling oil prices have hampered the bank's reflationary efforts, with the shock move aimed at proactively defending against global economic malaise denting business sentiment here, the bank also said it would continue to increase the monetary base at an annual pace of around 80 trillion yen (661.2 billion U.S. dollars).

The central bank said it will continue to aggressively purchase government bonds and risky assets under its quantitative and qualitative easing (QQE) program.

The bank hopes that its latest moves will encourage private lenders to support increased capital expenditure, which will purportedly bolster the economy and tackle deflation by increasing production, employment and wages, which will also help consumer spending, the latter of which accounts for 60 percent of Japan's gross domestic product.

Bank of Japan Governor Haruhiko Kuroda has consistently maintained he plans to eliminate what he has described as a "deflationary mindset" in Japan, particular regarding business spending, but also private consumption.

The bank has said it plans to achieve its inflation target "at the earliest possible time," amid turbulent oil prices, the protected slump of which has impacted prices here.

The central bank's policy board also decided last week that the bank will further cut the interest rate below minus "as deemed necessary." Enditem