Over 90 percent of Japanese banks have increased loans and investment in riskier assets in the past year, the Bank of Japan said on Wednesday, suggesting that the wall of money it is pumping out is spilling over into the broader economy.
“Financial institutions have reduced investment in domestic bonds, especially Japanese government bonds (JGBs), while increasing investment in relatively high-risk assets such as loans,” the central bank said in a semi-annual report analyzing Japan’s financial system.
The ratio of banks that increased investment in riskier assets, including loans, has gradually risen since last March and exceeded 90 percent in February, according to a survey included in the report.
Banks are lending to a wider range of industries and are more keen to lend to small- and medium-sized companies whose appetite for loans is on the rise, the report said.
Bank lending rose 2.1 percent in March from a year earlier, marking the 29th straight month of increase, with lending by regional banks up 3.2 percent, a monthly BOJ data showed.
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