Japan’s monetary base contracted further in March 2026, underscoring continued tightening in underlying liquidity conditions. According to data updated on 1 April 2026, the monetary base fell 11.6% year-over-year, following a 10.6% year-over-year decline in February 2026.
The figures are calculated on a year-over-year basis, comparing March 2026 to March 2025, and February 2026 to February 2025. The acceleration in the pace of contraction suggests that the reduction in the Bank of Japan–supplied money—such as banknotes in circulation and reserves held by financial institutions—continued to intensify as the first quarter drew to a close. Investors and analysts will be watching subsequent releases closely for signals on how sustained this downward trend in the monetary base may be and what it could imply for Japan’s broader financial conditions.
