TOKYO, Feb. 4 (Xinhua) -- Japan's monetary base increased by 10. 9 percent on year in January, the Bank of Japan (BOJ) said in a report on Monday.
The monetary base stood at 131.920 trillion yen in the recording period, following an 11.8 percent leap in April, the central bank said.
The increase of banknotes in circulation were 3.2 percent on year, while coins in circulation increased 0.6 percent on year.
On a seasonally adjusted basis, the monetary base increased 6.8 percent to 128.757 trillion yen, after an 18.2 percent increase logged in the previous month, the bank said.
Japan's monetary base refers to the amount of currency that is either circulated in the hands of people living in Japan or in domestic commercial bank deposits held in the central bank's reserves.
As an official measure of the Japanese money supply, the monetary base shows the immediate impacts of monetary policy actions and can give an indication of the future direction of inflation. An expansion in the monetary base is generally inflationary while a decline will likely have the opposite effect.
The Japanese administration maintains control over the monetary base by buying and selling government bonds in the open market.
The central bank's recent easing of monetary policies has facilitated the increase in January's monetary base, analysts said. (1 U.S. dollar = 92.71 Japanese yen).
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