The average daily balance of bank lending in May fell 2.1 percent from a year earlier to ¥396.12 trillion for the sixth straight month of decline, reflecting a continued weak corporate appetite for fresh operating money, the Bank of Japan said Tuesday.
After adjustment for special factors — loan securitization, exchange-rate fluctuations and the allocation of loan-loss reserves — the loan balance dropped 1.9 percent, also the sixth straight monthly fall, the central bank said in a preliminary report.
Including loans by "shinkin" small cooperative banks, the lending balance totaled ¥458.75 trillion before adjustment, down 2.0 percent for the sixth consecutive month of loss.
"Companies' demand for operating funds and capital investment funds remain weak," a BOJ official said. "There is no change in this situation."
The 2.1 percent fall marked the largest rate of decline since August 2005.