Japan’s bank lending slowest in nine years: report

The slowdown reflects sluggish consumption as households hoard cash.

Japan's bank lending rose in July at the slowest annual pace in nearly nine years, reports Reuters, based on data released by the Bank of Japan on 10 August.

Total bank lending rose 1% in July from a year earlier, slowing from a 1.4% gain in June and marking the lowest year-on-year increase since November 2012.

On the upside, this is a sign that companies are emerging steadily from a cash crunch last year caused by the coronavirus pandemic.

But the slowdown in lending also reflects sluggish consumption as households hoarded cash instead of spending, underscoring the fragile nature of Japan's economic recovery.

Major banks saw lending fall 1.4% in July from a year earlier after a 1.6% drop in June, largely in reaction to last year's surge in fund demand to deal with the pandemic's shock.

Regional banks increased lending by 2.3% in July, a slowdown from a 2.9% gain in June.

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