The average daily balance of bank lending dropped 3.1 percent in August from a year earlier, marking the 80th straight month of decline, the Bank of Japan said Wednesday in a preliminary report.
The declining streak mirrors the fact that fund demand in the Japanese corporate sector is still weak and companies are striving to reduce their debt burden, the central bank said.
The margin of decline in August is somewhat smaller than the 3.9 percent fall in July and the 4.2 percent drop in June.
The balance of loans at five types of Japanese banks declined to 386.68 trillion yen.
The data cover banks with nationwide branch networks, known as city banks, long-term credit banks, trust banks, regional banks and second-tier regional banks.
Including the data for "shinkin" savings-and-loan banks, the balance of bank loans fell 2.8 percent to 448.14 trillion yen.
The average daily balance of lending by foreign banks operating in Japan fell 18.5 percent to 5.18 trillion yen, after falling by a revised 24.4 percent in July.
Money supply up 1.9%
Japan's most closely watched money supply gauge grew 1.9 percent in August from a year before, following a revised 1.8 percent rise the previous month, the Bank of Japan said in a preliminary report Wednesday.