Bank lending fell for the eighth consecutive month in July as demand for operating funds stayed persistently weak, the Bank of Japan said Monday in a preliminary report.
Average lending on a daily basis fell 1.9 percent to ¥394.98 trillion from July the previous year, narrowing the decline from 2.1 percent in May and June. The latest figures, however, still suggest that many companies are not eager to borrow.
Some market analysts say domestic financial institutions have been putting their excess funds into the bond market, a shift that has helped yank down long-term interest rates.
The yield on the benchmark 10-year Japanese government bond fell below 1 percent last week for the first time in seven years as safe-haven demand for Japanese sovereign debt grew amid continuing uncertainty over the outlook for the global economy.
Lending in July fell 1.7 percent after adjustment for special factors, including loan securitization, exchange-rate fluctuations and allocation of loan-loss reserves.