Japan Bank lending

In April 2017, the bank lending in Japan grew by 3.0% year on year, maintaining the high level of growth.

Published monthly by Bank of Japan.  Updated to the month of April 2017 (published on May11th, 2017).

Recent data trend:

Bank lending in Japan grew by 3.0% year on year (YoY) in April 2017, same as the previous month. We would argue that it is virtually the highest growth Japanese banks saw post the bubble years in early 1990s. Bank lending did grow by 4% YoY in January 2009, but the growth back then was abnormal, fueled by temporary demands from large corporations as capital markets went into freeze by the Lehman shock. 

The acceleration in bank lending is caused by the acceleration in lending by city banks. While bank lending growth by regional banks have been fluctuating around 3.5% in the past three years, we are seeing a remarkable growth in lending by city banks in the past 9 months. Bank lending growth by city banks has accelerated from 0.5% YoY in August 2016 to 2.4% in April 2017.

A breakdown of bank lending by borrowers, which become available with one month lag, shows that it is fixed investment related loans, most notably housing loans to households, that are boosting the lending growth. Bank lending growth for the purpose of fixed investment by households, mostly consisting of housing loans, has accelerated from 2.1% YoY in March 2016 to 3.2% YoY in February 2017. The negative interest rate policy introduced by the BoJ in January 2016 has not been particularly popular, but it must be one of the factors behind the re-acceleration in the bank lending growth in the past 12 months. 

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.

For more information, visit the official government page

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: June 8th, 2017.

Suggested Pages

Japan Gross Domestic Product

The growth estimate for the Japanese economy in the October/December quarter was 0.3% quarter on quarter, remaining unchanged from the July/September quarter.

View Page

Money Supply

In February 2017, M2 grew by 4.2% YoY, a slight acceleration from 4.0% in January.

View Page

Interest Rates

Japan 10-year JGB interest rate was 0.069% in March 2017 on average.

View Page

FX Reserve and Intervention

In March 2017, the Japanese Government did not conduct any FX Intervention. Japan had a total FX reserve of 1.23 trillion USD in March 2017.

View Page