TOKYO —

A money supply index mostly consisting of ordinary bank deposits fell in fiscal 2007 for the first time in 44 years as holders of ordinary deposits shifted money into time deposits and other higher-yielding financial instruments, according to data released Thursday by the Bank of Japan.
   
The average balance of M1—consisting of cash in circulation, ordinary deposits and other types of demand deposit—fell 0.2% during the 12-month period to March 31 to 387.01 trillion yen.

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  GrouchyGaijin at 04:51 PM JST - 10th April

  Well, at 0.05% interest to preferred customers what do they expect? Even low yield short and medium time deposits available online are yielding 3%+, so why would anyone wait with bated breath for their JPY23 in interest, watch it get taxed, and jump for joy at the remaining pittance? Heck, playing the currency markets online gets more, without significant risk. About last October or so, the Japan Times or IHT reported that the equivalent 27% of annual GDP in cash was moved offshore in the third quarter "by individuals" (not companies or banks) to higher yield financial instruments. If that trend continued, just think, more than 100% of GDP would leave as cash in one year! Wow, that's why we have a cash flow crunch.....it's emigrated!

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