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Thursday, October 13, 2005

Japan: A More Positive Note

I am sure there are plenty of people who would accuse me of selectively reading the data on Japan. Maybe sometimes this is true. So today we have the positive news that lending by Japanese banks increased in September for the second straight month.

The 0.4 per cent year-on-year rise in bank lending in September came after adjustments for special factors such as write-offs and securitisations. This measure is regarded as a better indicator of the overall trend than the unadjusted figures – which showed lending in September continuing to decline but at a slower pace.

Analysts have differed on whether the recent improvement in the lending figures indicate primarily that banks are more willing to lend now that they have cleared up their balance sheets, or that businesses are more eager to borrow.

On the other hand, as the article points out:

Some analysts were cautious about Thursday’s announcement, pointing out, for example, that lending by public financial institutions, which was not included, had been falling sharply.

at the same time news is in that there was a 15.6% fall in Japan’s current account surplus in August. The value of exports increased by 8.8%, but imports rose 24.1% – boosted largely by the high oil prices.