Revision of Monetary Base Statistics

May 15, 2000
Research and Statistics Department
Bank of Japan

The Research and Statistics Department is currently revising various monetary statistics reflecting changes in the financial environment.  As part of this revision, please be advised that the definition of monetary base will be changed from "total amount of Bank of Japan notes issued, coins in circulation, and reserve balances" to "total amount of Bank of Japan notes issued, coins in circulation, and current deposits at the Bank of Japan." (Reserve balance figures will continue to be released as part of current deposits at the Bank of Japan.)  In line with this revision, retroactive data prior to April 1997 will also be released.

The concept of monetary base is not well established but the Bank of Japan regards it as indicating "currency supplied by the Bank of Japan."  From this viewpoint, there was not much difference whether the statistics used current deposits at the Bank of Japan or reserve balances since the amount of current deposits at the Bank of Japan not regarded as reserve balances was negligible.  However, taking the experience of the "zero-interest rate policy" into consideration, it has become evident that institutions not subject to the Reserve Requirement System (tanshi companies <money market brokers-cum-dealers>, securities companies etc.) also hold a considerable amount of current deposits at the Bank of Japan, depending on financial market conditions.  Thus, we have decided to revise monetary base statistics as it would be more appropriate to use current deposits at the Bank of Japan to indicate "currency supplied by the Bank of Japan" instead of reserve balances.