Japan’s broad money growth slowed in October, with M2 rising 1.7% from a year earlier as M3 and broadly defined liquidity also lost pace, according to preliminary Bank of Japan data released Nov. 11.
The Bank of Japan (BOJ) put M2 growth at 1.9% in September, a revised figure, and 2.0% in August. These percentages compare average balances outstanding with the same period a year earlier. M2’s average outstanding balance was 1,291.4 trillion yen in October, compared with a revised 1,294.9 trillion yen in September. Its year-over-year growth eased for a second consecutive month.
M3 growth fell to 0.9% from a revised 1.1% in September, while its average balance was 1,633.2 trillion yen, down from 1,637.1 trillion yen. The BOJ calculates L by counting M3 alongside other components. L rose 4.1% year over year after a 4.3% September increase; its October average balance was 2,341.2 trillion yen, compared with a revised 2,343.3 trillion yen a month earlier.
The release also reports seasonally adjusted changes from the previous month at annualized rates, a different calculation from year-over-year growth. October’s annualized rates were -0.4% for M2, -0.8% for M3 and 1.0% for L. Read separately, those measures indicate a month-to-month decline for M2 and M3 but an increase for L, even as each aggregate remained above its level a year earlier.
Underlying components also varied: quasi-money increased 4.4% year over year, while currency in circulation fell 1.5%, deposit money declined 0.2% and certificates of deposit dropped 16.1%. The Bank of Japan revised figures from July 2026 onward. Earlier data in the BOJ’s monthly money stock series showed M2 growth at 2.5% in May and M3 at 1.7%, before their October readings declined. The latest release follows the September report, which showed M2 at 2% and M3 at 1.2%.
