FX.co ★ Japan’s Monetary Base Contraction Eases Slightly in September, Still Deeply Negative YoY

Japan’s monetary base remained in sharp decline in September 2026, though the pace of contraction eased marginally compared with the previous month, according to data updated on 1 October 2026. The monetary base fell 15.2% year-over-year in September, improving slightly from a 15.7% year-on-year drop recorded in August 2026.

The figures are calculated on a year-over-year basis, comparing each month to the same month a year earlier. While the less severe contraction in September suggests some stabilization in the pace of monetary tightening or liquidity withdrawal, the data still point to a significantly smaller central bank balance sheet compared with a year ago. Investors and analysts will be watching upcoming releases closely to gauge whether this moderation continues and what it may signal for Japan’s broader monetary and financial conditions.