Japan bank loans hit record high as firms brace for pandemic strains

Outstanding loans reached $5.5t in December, 6.2% higher than last year.

Japanese bank lending hit a fresh record in December 2020, with companies piling up cash as they brace for the fallout from the pandemic, reports Reuters, based on data from the Bank of Japan (BOJ).

Outstanding loans held by the country’s four main categories of banks, including “shinkin” or credit unions, rose 6.2% YoY in December compared to a year earlier and reached a record $5.5t (JPY577.6t), official data showed.

Total deposits at the banks also surged 9.3% YoY to a record $7.76t (JPY802.9t).

“Some companies were holding back on capital expenditure and cutting fixed costs,” which was also behind the increase in deposits, a BOJ official told a briefing.

Aside from lending, commercial banks were using the money from the huge deposits to increase purchases of short-term securities and government bonds, the official said.

Here’s more from Reuters.

($1 = JPY104.18)

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