AI Data Insight
Japan's real M1 money supply in the third quarter (July) of 2026 dropped to 1,090.5 trillion yen, down from the previous reading of 1,096.3 trillion yen, reflecting a mild contraction in market liquidity. As the Bank of Japan signals further tightening, households and corporations are accelerating the shift of cash into higher-yielding assets such as investment trusts. In the short term, M1 data is expected to remain suppressed, and capital flows will become a key indicator for observing the pace of Japan's monetary policy normalization.