Japan’s slow growth in bank lending alleviates cash crisis
Japan’s bank lending increased at the slowest annual rate in July. The reading indicated the gradual recovery of businesses from last year’s pandemic-driven cash shortage.
The Bank of Japan on Tuesday showed a 1.0% jump in total bank lending in July from a year earlier. The figure was slower than a 1.4% mark in June, hitting the lowest year-on-year increase since November 2012.
The slowdown in lending underscored a poor consumption following households’ hoarding of cash rather than spending.
The average balance of bank deposits climbed 5.7% in July from a year earlier at 831 trillion yen ($7.53 trillion). It largely exceeded bank lending’s 578 trillion yen.
Meanwhile, last year’s surge in fund demand resulted in major banks’ 1.4% fall in July from a year earlier. It followed a 1.6% collapse in June.
Regional banks, on the other hand, expanded lending by 2.3%, a drop from June’s 2.9% gain.