Japan monetary base tops central bank's target

Japan's monetary base surged 36.7 percent from a year earlier to JPY 275.88 trillion (USD 2.31 trillion) at the end of 2014, achieving the Bank of Japan's (BOJ) target of JPY 275 trillion (USD 2.30 trillion), the central bank said Tuesday.
That was up from JPY 262.69 trillion (USD 2.20 trillion) held at the end of November, and the highest level since comparable data available since July 1996.
The monetary base comprises money supplied to the markets by the BOJ, including cash in circulation and commercial banks' deposits held at the BOJ's current accounts. An expansion in the monetary base has inflationary effect.
The increase was attributed to BOJ's continuing purchases of government bonds and other securities. In April last year, the BOJ introduced drastic measures to double the monetary base in two years by pumping large amounts of money into financial markets to achieve its 2-percent inflation goal and pull Japan out of deflation that has lasted for nearly 15 years.
Oct. 31, the central bank unexpectedly announced additional stimulus to achieve the inflation target, including expansion of monetary base and purchases of government bonds. Under the fresh measures, the BOJ increased the monetary base at an annual pace of about JPY 80 trillion (USD 670 billion), up from the previous JPY 60-70 trillion (USD 500-590 billion).
As a result, it also raised the goal of the monetary base to JPY 275 trillion at the end of this year, instead of an initial target of JPY 270 trillion.