TOKYO (Reuters) – Japan’s currency in circulation and bank deposits rose at a record annual pace in August as companies and households continued to pile up cash to guard against the coronavirus- driven income slump, central bank data showed on Wednesday.
The data underlines the difficulty of prodding companies and households to start spending again, even as the economy gradually re-opens after lockdown measures were lifted in May.
Japan’s M3 money stock – or currency in circulation and deposits at financial institutions – rose 7.1% in August from a year earlier, marking the biggest increase since comparable data became available in 2004, Bank of Japan data showed. The rise topped a 6.5% gain in July.
Bank deposits surged a record 15.3% in August from a year earlier, as the hit to sales from COVID-19 prompted companies to continue to hoard cash as a precaution.
Cash in circulation rose 5.5% in