Japan's monetary base hits new record high

Japan's monetary base soared 42.0 percent in August from a year earlier to JPY172.44 trillion (USD 1.7 trillion), marking an all-time high for the sixth straight month, the central bank said Tuesday. The monetary base, which comprises money supplied to the markets by the Bank of Japan (BOJ), including cash in circulation and commercial banks' deposits held at the BOJ's current accounts, also grew for the 16th month in a row. An expansion in the monetary base has inflationary effect. The rise was the biggest since November 1973, when it logged the 43 percent gain on the year. The BOJ vowed in April to double the monetary base in two years, chiefly through the purchases of government bonds from financial institutions and money market operations, to overcome the country's deflation that has lasted for nearly 15 years. The central bank aims to increase the monetary base at an annual pace of about JPY 60-70 trillion (USD 600-700 billion).