2 Minutes Read TOKYO, Japan (Reuters) – According to central bank data released on Thursday, Japanese bank lending increased at its slowest annual rate in more than eight years in June, as corporate fund demand to weather coronavirus-related cash limitations eased. PHOTO FROM THE FILE: In Tokyo, Japan, on May 22, 2020, a man wearing a protective mask poses in front of the Bank of Japan headquarters during the coronavirus illness (COVID-19) outbreak. REUTERS/File Photo/Kim Kyung-Hoon As corporations and families held off on spending, total deposits parked with commercial banks continued to increase and set a new high last month, according to the data. The data support the assumption that many businesses are recovering from the pandemic’s immediate effects, but are hoarding cash due to anxiety about the economy’s future. At a press conference, a Bank of Japan official said, “The balance of bank lending remains elevated, but corporate fund demand appears to be receding.” According to BOJ data, total outstanding loans held by Japanese banks increased 1.4 percent year over year in June to 578 trillion yen ($5.23 trillion), the weakest growth rate since January 2013. Last month, lending at major banks fell 1.6 percent year over year, the first drop since November 2012, as several significant borrowers paid back loans thanks to higher profits. Bank deposits reached an all-time high of 834 trillion yen, a new high. Although Japan has not witnessed the catastrophic COVID-19 epidemics observed in many other nations, it has seen over 800,000 cases and 14,800 deaths. Slow vaccine rollouts and a rebound in illnesses are likely to require officials in Tokyo to declare a state of emergency until August 22, placing even more strain on the economy. (1 dollar Equals 110.5600 yen) Leika Kihara contributed reporting, while Shri Navaratnam edited the piece./n
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