Japanese bank lending fell by the most in more than four years in January. According to the Bank of Japan, lending, excluding loans by credit associations, dropped 1.7 percent last month from a year earlier, the largest decline since September 2005. The drop, amid a five-year low in demand for loans, compares with a 1.2 percent contraction in December.
With more than a third of factory capacity sitting idle in Japan, companies remain reluctant to increase spending even as the economy recovers from its worst postwar recession with larger companies looking to bond markets which are showing signs of life.
Acom Co. and Nippon Building Fund Inc. sold bonds in January for the first time since 2008, and were among 32 Japanese companies to issue bonds since the start of the year. Bonds issued by Japanese companies rose by 50 percent in January to 795 billion yen ($8.9 billion), from 529 billion yen in the same month a year earlier, Bloomberg data show.
Machinery orders, an indicator of business investment, plunged to a record low in November. Large companies plan to cut capital spending 13.8 percent in the year ending March, according to the Bank of Japan’s Tankan survey.
Lending by Japan’s 10 so-called city banks, including Mitsubishi UFJ Financial Group Inc., fell 3.4 percent following a 3.1 percent drop the previous month, the Bank of Japan said.
“Companies aren’t willing to take on the risk of increasing borrowing and spending amid deflation,” said Junko Nishioka, chief economist at RBS Securities Japan Ltd. in Tokyo.
http://www.businessweek.com/news/2010-02-08/japanese-bank-lending-declines-most-in-four-years-update3-.html
No comments:
Post a Comment