MNI BRIEF: Japan Corp Loan Demand Rises: BOJ Survey

Demand for financing by Japanese corporates via commercial banks increased from three months ago as sales and capital investment picked up, the Bank of Japan’s senior loan officer opinion survey on bank lending practices showed Wednesday.

The index for corporate fund demand, calculated by subtracting the number of banks reporting weaker demand from those reporting stronger demand, rose to +7 in October from +3 in July.

The index for expected fund demand over the next three months eased to +2 from +3 in the previous survey, suggesting firms are not in a hurry to raise funds amid heightened uncertainty.

By firm size, the index for large companies was unchanged at +7, while that for small and medium-sized enterprises rose to +6 from zero.

Lingering concerns over higher interest rates ahead of a potential BOJ rate hike contributed to steady demand for financing, the BOJ said.

The survey covered the period from Sept 10 to Oct 10, when markets expected the BOJ could raise its policy rate as early as the Oct 29-30 meeting.