Japan's monetary base rose 2.1 percent in March from a year earlier, marking the 19th successive month of increase, said the Bank of Japan (BOJ) in a report on Friday.
According to the central bank the average daily balance, comprised of both cash in circulation and the balance of current account deposits held by financial institutions at the BOJ, totaled 96.46 trillion yen (1.27 trillion U.S. dollars).
Additionally, the current account deposit balance rose 13.0 percent to 15.13 trillion yen (161.22 billion U.S. dollars).
The balance of BOJ bank notes in circulation increased 0.4 percent to 76.82 trillion yen (818.59 billion U.S. dollars), although the balance of coins in circulation decreased 0.6 percent to 4.50 trillion yen (47.95 billion U.S. dollars), the BOJ said.
Prime Minister Yukio Hatoyama's government has applied mounting pressure on the central bank to bring an end to consumer- price declines this year and Finance Minister Naoto Kan has repeatedly urged the BOJ to step up its efforts to defeat deflation, which threatens to erode corporate earnings and make outstanding corporate debt harder to pay off.
Subsequently the central bank has been injecting more liquidity into the financial system as a means to combat increasing deflation.
However, signs of a sustained economic recovery in Japan, including the central bank's Tankan survey Thursday which showed big manufacturers have become less pessimistic about business conditions, may be enough for BOJ Governor Masaaki Shirakawa to put off any decision to increase the central bank's liquidity injections until the next BOJ policy meeting at the end of the month./.