BOJ Monetary Base Shrinks 13.8% as Normalization Efforts Continue

The Bank of Japan's monetary base shrank by 13.8% year-on-year in July, marking the 26th consecutive month of decline.

This contraction is a result of the BOJ reducing its bond purchases and allowing maturing assets to run off.

The pace of contraction has stabilized at historically high levels, indicating that the central bank's normalization efforts are continuing.

A shrinking monetary base can reduce the supply of money in the economy, supporting the yen's value and putting upward pressure on interest rates.