TOKYO (MNI) – Outstanding bank loans in Japan at the end of October
posted the first year-on-year rise in 23 months, up 0.1%, indicating
funding demand for capital investment is gradually recovering, Bank of
Japan data released Wednesday showed.
Bank lending edged up to Y394.6 trillion in October after falling
0.3% in September.
The pace of decline had decelerated in recent months as corporate
fund demand increased somewhat, reflecting reconstruction needs after
the March earthquake disaster.
In addition, there was an increase in fund demand from electric
power companies, which are having difficulties issuing bonds in light
of losses from shutting down nuclear power plants, as well as from firms
that are seeking capital for mergers and acquisitions.
Combined bank borrowings by 10 major electric companies surged to
Y10.64 trillion as of Sept. 30, up almost Y1 trillion from six months
earlier, the Nikkei reported.
Utilities had traditionally relied on bond issuances to raise
funds, but issuances have been difficult since the Fukushima nuclear
crisis, with companies facing eroding profitability as their nuclear
reactors remain offline, it said.
In October, outstanding loans by city banks, the largest group of
lenders in Japan, fell 1.6% from a year earlier, the 23rd consecutive
month of y/y drop after -2.3% in September.
The decreases in lending by city banks was offset by a continued
rise in lending by regional banks, up 1.8% in October, growing at the
same pace as in September.
The balance of commercial paper issuance stood at Y8.9 trillion at
the end of October, down 8.7% y/y following a 8.3% fall in September.
tokyo@marketnews.com
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