TOKYO- Japan’s bank lending rose in July at the slowest annual pace in nearly nine years, data showed on Tuesday, a sign companies were emerging steadily from a cash crunch last year caused by the coronavirus pandemic.
But the slowdown in lending also reflected sluggish consumption as households hoarded cash instead of spending, underscoring the fragile nature of Japan’s economic recovery.
Total bank lending rose 1.0 percent in July from a year earlier, Bank of Japan data showed, slowing from a 1.4 percent gain in June and marking the lowest year-on-year increase since November 2012.
Bank lending surged last year when companies were in need of immediate cash to ease the impact of the coronavirus pandemic on business.
“Some companies were paying back loans they tapped as a precaution,” a BOJ official told a briefing. “Bank deposits remain at high levels, which shows households are cautious about boosting spending,” he added.
The average balance of bank deposits rose 5.7 percent in July from a year earlier at 831 trillion yen ($7.53 trillion), far exceeding the 578 trillion yen for that of bank lending, the data showed.
