Will the surge in the money supply boost inflation?

The money supply has recently been growing at the fastest rate in at least two decades, boosted by government giveaways and generous lending to non-financial firms. However, the expansion in the monetary aggregates falls short of the rates seen in other large advanced economies and we think it will slow again as economic conditions normalise. What’s more, Japan’s stubbornly low inflation expectations mean that a marked increase in inflation is unlikely.