• Kyodo News

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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.

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