Japan’s monetary base continued to shrink on a year-over-year basis in January 2026, but the pace of contraction moderated slightly compared with the previous month, according to data updated on 2 February 2026.
The monetary base fell 9.5% year-over-year in January 2026, following a 9.8% decline in December 2025. Both figures are based on comparisons with the same month a year earlier, indicating that while liquidity in the financial system is still contracting, the rate of decline has narrowed marginally at the start of the new year.
The “actual” January reading reflects the change versus January a year earlier, while the “previous” figure for December measures the change versus December of the prior year. The slight easing in the contraction could be monitored closely by markets as a signal of how underlying monetary conditions in Japan may be stabilizing after a period of pronounced year-over-year declines in the monetary base.
