Published monthly by Bank of Japan. Updated to the month of December 2016 (published on January 12th, 2017).
Recent data trend:
Bank lending growth in Japan was 2.4% year on year in November 2016, remaining unchanged from the previous month. The growth in deposits has also accelerated to 4.3% YoY in November, up from 3.9% in October.
It has been half a year since the BoJ introduced a negative interest rate policy (NIRP). While we do see some acceleration in deposits growth, it is unclear if the growth is a result of stronger credit provision. Some of the growth in deposits can be explained as transfers from investment trust products. Significant portion of fixed income type investment vehicle, such as money market funds, have been closed as the product lost viability due to the prevailing negative interest rates. In the meantime, we have not seen much sign of invigoration in banking lending activities. In our view, the NIRP may have worked in other areas, but it does not seem to succeed in kick starting new demand for credit in Japan.
Brief overview of "Bank Lending"
In Japan, bank loans are still the dominant form of credit provision. At the end of 2012, loans outstanding made by private financial institutions totaled 698.9 trillion yen while corporate bonds including CPs totaled mere 93.4 trillion yen. “Bank lending” statistics, released by the Bank of Japan, surveys major banks, regional banks and Shinkin banks and together covers about 2/3 of the total private loans made in Japan. Financial institutions not covered by this statistics include agricultural corporatives, credit unions and foreign banks. Bank lending statistics also includes surveys of deposits. At the end of 2012, total deposits surpassed the total lending by 173 trillion yen and the financial market tends to view this gap as a measure for the demands for JGBs by banks.
Bank lending growth YoY%
Bank lending by Borrowers
Note: In this chart, "Bank lending" refers to simple addition of "Domestically Licensed Banks" and "Shinkin Banks" as defined by the BoJ. For more details, please see our brief overview below.
Brief overview of "Bank lending by Borrowers"
The original data for "Bank lending by borrowers" statistics is published by the Bank of Japan as "Deposits, Vault Cash, and Loans and Bills Discounted". The dataset is released with 4-6 weeks lag. The data are compiled at the end of the month basis. For more details please see the BoJ statistics page here.
Source: BoJ, JMA
The Next Release Date: February 8th, 2017.