The graph above shows Japan’s money supply between 1868 and 2010. This data came from a lot of different sources, and the Bank of Japan has not been consistent in its record keeping, so I am not as confident about this data as I am about my research on the U.S. money supply. However, I am certain that the Yen has been inflated at an incredible rate.
Isn’t it interesting how quantitative easing in Japan hasn’t re-inflated asset prices to their pre-bubble level?
Data for 1868 to 1893 comes from “Economic Fluctuations in Japan, 1868-1893,” by Shigeto Tsuru (1941). Data for 1914 to 1919 is based on “Debts, Revenues and Expenditures and Note Circulation of the Principal Belligerents,” by Louis Ross Gottlieb (1919). Data for 1920 to 1928 is estimated from “Economic Developments and Monetary Policy Responses in Interwar Japan: Evaluation Based on the Taylor Rule,” by Masato Shizume (2002). Data for 1929 to 1939 is based on estimates from “Effects on Japan of Depreciation of the Yen,” by the Institute of Pacific Affairs and Shizume’s work. 1946 to 2010 data is from the Bank of Japan, although the money supply was not uniformly calculated thought the years.