Japan bank lending slides as funding demand weak

Japanese bank lending logged its biggest annual fall in more than four years in January as companies faced with overcapacity and a murky economic outlook steered clear of borrowing for capital investment purposes. The softness in domestic demand could also be seen in Japan’s current account surplus, which surged more than fivefold in the year to December thanks to a recovery in exports. While that bodes well for the outlook for an export-led recovery, Bank of Japan Deputy Governor Hirohide Yamaguchi said the economy could linger in the doldrums until around the summer before getting back on a more sustainable course to recovery. “We expect the recovery to continue, but the economy will be in a severe condition until the summer. Quarter-on-quarter growth won’t be big, and we may even hit a soft patch,” Yamaguchi told parliament’s lower house budget committee. [Read the full article]

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European stock index futures reversed earlier losses to trade higher on Monday, pointing to a higher start for equities after a three-day losing run as firmer raw material prices may lift energy and mining stocks. By 0728 GMT, futures for DJ Euro Stoxx STXEc1, Germany’s DAX FDXc1 and France’s CAC 40 FCEc1 were up 0.1 and 0.7 percent. (Reporting by Dominic Lau, editing by Atul Prakash) TOKYO (Reuters) – Toyota Motor Corp is preparing a recall of its new Prius hybrid car in Japan as early as Tuesday, followed by similar steps in the United States, Europe and other markets, a source familiar with its plans said. [Read the full article]

Japan’s Nikkei stock average sank 1.1 percent to a two-month closing low on Monday, with exporters such as Sony Corp (6758.T) hurt by a stronger yen, while anxiety over fiscal problems in Europe continued to dent investor confidence. Kirin Holdings (2503.T) fell more than 7 percent after saying that it and fellow brewer Suntory [SUNTH.UL] had scrapped a plan to form one of the world’s largest food and beverage makers, citing differences over governance and a merger ratio. [ID:nTOE61702U] Toyota Motor Corp (7203.T) fell 1.1 percent to 3,280 yen despite spending much of the day in positive territory after its president apologised on Friday for safety problems and said the automaker would bring in outside experts to review quality controls. [Read the full article]

Japanese bank lending logged its biggest annual fall in more than four years in January as companies faced with overcapacity and a murky economic outlook steered clear of borrowing for capital investment purposes.

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The softness in domestic demand could also be seen in Japan’s current account surplus, which surged more than fivefold in the year to December thanks to a recovery in exports.

While that bodes well for the outlook for an export-led recovery, Bank of Japan Deputy Governor Hirohide Yamaguchi said the economy could linger in the doldrums until around the summer before getting back on a more sustainable course to recovery.

“We expect the recovery to continue, but the economy will be in a severe condition until the summer. Quarter-on-quarter growth won’t be big, and we may even hit a soft patch,” Yamaguchi told parliament’s lower house budget committee. [Read the full article]

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