The outstanding balance of overseas investments and loans by Japanese banks totaled $1.179 trillion at the end of December, down 5.6 percent from the end of September, the Bank for International Settlements said in a report Tuesday.
The substantial decrease in the balance reflects curbed lending by Japanese banks due to consolidation within the industry, analysts and banking officials said.
In addition, faced with falling credibility under the weight of bad loans, Japanese banks are sharply cutting back on their overseas assets, they said.
Overseas investments and loans by Japanese banks, which had been on the decline since the burst in the early 1990s of the asset-inflated economic bubble, turned upward at the end of 2000.