How Should the Recent Increase in Japan's Monetary Base Be Understood?

Monetary base is generally defined as 'all central bank liabilities to the financial corporations and other sectors'. In Japan, it is the quantitative monetary indicator which represents 'the amount of currency supplied by the Bank of Japan (the Bank)' and consists of the current account balances held at the Bank (accounting for 10-20%) and cash in circulation (banknotes and coins, 80-90%). These two components share the common features: (i) both are currency with the highest liquidity (convenience as a method of payment); (ii) both are liabilities of the Bank or the government; (iii) both are supplied through the Bank; and (iv) neither bear interest rates.