Global Market: Japanese banks see rising corporate loan demand
Benchmarks Nifty22,687.65-123.7FEATURED FUNDS★★★★★UTI Aggressive Hybrid Fund Regular Plan-Growth5Y Return8.76 % Invest NowFEATURED FUNDS★★★★★Motilal Oswal Midcap Fund Direct-Growth5Y Return18.76 % Invest NowEnter search…
Japanese banks report rising corporate funding demand despite the Bank of Japan’s 1.25% interest rate, reinforcing expectations of further monetary tightening. Persistent inflation risks, resilient lending and government concerns will shape the central bank’s upcoming policy decision.
Major Japanese banks are seeing stronger demand for corporate funding than three months ago, a Bank of Japan survey showed on Thursday, suggesting that recent interest rate increases have yet to significantly constrain borrowing, Reuters reported.The findings come ahead of the BOJ's policy meeting next week and reinforce market expectations that the central bank will continue raising interest rates from their current level of 1.25% to contain the risk of inflation exceeding its 2% target.
As on 22 Oct 2026, 01:30 AM IST
S&P 500 Top Gainers
Super Micro Computer35.57(9.55%)Charles River344.87(9.33%)Datadog273.09(6.50%)Dell Technologies485.88(5.27%)S&P 500 Top Losers
Coterra Energy32.56(-8.62%)AT&T21.91(-6.45%)DexCom80.26(-6.39%)Netflix65.04(-5.31%)Read more: Chinese stock market enters bear territory! CSI 300 index crashes 20% from June peak
A diffusion index measuring the balance between major banks reporting an increase in corporate funding demand and those reporting a decline stood at +3 in a survey conducted between September 9 and October 13, compared with -1 in the previous survey three months earlier, according to the BOJ data cited by Reuters.
The positive reading indicates that more banks experienced an increase in corporate demand for funds than a decline.
Live Events
The results follow the BOJ's quarterly Tankan survey, released on October 1, which showed that more companies considered funding conditions to be loose than those that viewed them as tight.
The BOJ raised its policy rate to 1.25%, a 31-year high, on September 18, signalling a greater focus on preventing inflation from overshooting its target. Analysts expect another rate increase in December or January, Reuters reported.
Read more: Global Market Today: Asian stocks mixed as oil rally, AI concerns weigh on sentiment
The resilience of corporate borrowing is becoming an increasingly important factor in determining the timing of the BOJ's next policy move. The central bank has said it will assess how previous rate increases affect corporate funding conditions to determine how close interest rates are to a level considered neutral for the economy.
Financial conditions remain accommodative despite the latest rate increase, BOJ Deputy Governor Ryozo Himino said on Wednesday, pointing to low real borrowing costs and strong growth in bank lending. His remarks indicated that the central bank remains open to further monetary tightening, according to Reuters.
Shigeto Nagai, head of Japan economics at Oxford Economics, said the economy's resilience to higher interest rates could give the BOJ room to raise rates beyond 1.75% to limit further yen weakness and prevent inflation expectations from becoming unanchored.
Markets will also scrutinise the BOJ's assessment of financial conditions in its quarterly outlook report, due after its two-day policy meeting ends on October 30, for indications of how far interest rates could rise.
Government stance in focus
Prime Minister Sanae Takaichi's administration has softened its criticism of the BOJ's rate-hiking approach, although concerns could resurface if higher borrowing costs put pressure on smaller companies, Reuters reported.
Economy Minister Minoru Kiuchi, considered an advocate of reflationary policies and an ally of Takaichi, said on Tuesday that he hoped to attend next week's BOJ meeting as one of the government's two representatives.
A summary of opinions from the BOJ's September meeting showed that a government representative had urged the central bank to proceed cautiously with further rate increases.
Ayako Fujita, chief economist at JPMorgan Securities Japan, said any shift in the government representative's tone at the upcoming meeting would offer clues about whether the administration has moved toward a position that respects the BOJ's independence, Reuters reported.
The balance between persistent inflation risks, resilient corporate borrowing and the government's concerns over higher financing costs is likely to remain central to the BOJ's next policy decision.
(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)
Add as a Reliable and Trusted News Source Add Now!
(You can now subscribe to our ETMarkets WhatsApp channel)
Read More News onBank of Japan interest ratesJapan corporate borrowing demandBOJ monetary policyJapanese banks lending surveyJapan inflation outlookBOJ rate hike expectationsJapanese corporate fundingyen weaknessSanae Takaichi governmentJapan interest rate forecast
(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)
Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
...moreless(You can now subscribe to our ETMarkets WhatsApp channel)
Read More News onBank of Japan interest ratesJapan corporate borrowing demandBOJ monetary policyJapanese banks lending surveyJapan inflation outlookBOJ rate hike expectationsJapanese corporate fundingyen weaknessSanae Takaichi governmentJapan interest rate forecast
(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)
Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
...morelessPrime ExclusivesInvestment IdeasStock Report PlusePaperWealth EditionThe global business of promising more
One company, 2 words. Bond yield and CDS: Will they decide the fate of global markets?
Business of Odd Things: Inside an industry that farms fish that nobody is meant to eat
War's second-order effects are becoming visible in critical sectors
US mid-term elections – Part 2: What does it mean for Trump to lose control of Congress?
Homebuyers wait as NCLT panel picks holes in unfinished Jaypee projects
- 1
- 2
- 3
& personalised newslettersLogin NowUnlimited AccessStarting @ Rs120/monthGet access to exclusive stories, expert opinions &
in-depth stock reportsSubscribe NowET
Unlock Access to All Exclusives with ETPrime FREE TRIAL
15 Days Free: Unlock All ETPrime Exclusives, Market Tools & ePapers
Trial offer expiring in00 : 05 : 00
I'd rather pay ₹2599 nowUh-oh! This is an exclusive story available for selected readers only.
Worry not. You’re just a step away.
Prime Account Detected!
It seems like you're already an ETPrime member with
Login using your ET Prime credentials to enjoy all member benefits
Log out of your current logged-in account and log in again using your ET Prime credentials to enjoy all member benefits.
Unlock ETPrime's Exclusive Stories Today!
Big Price Drop! Flat 40% Off
Student Only OfferAlready a Member? Sign In nowAlready a Member? Sign In nowAlready a Member? Sign In nowOffer Exclusively For You
Save up to Rs. 700/-
ON ET PRIME MEMBERSHIP
Avail OfferOffer Exclusively For You
Get 1 Year Free
With 1 and 2-Year ET prime membership
Avail OfferOffer Exclusively For You
Get 1 Year Free
With 1 and 2-Year ET prime membership
Avail OfferOffer Exclusively For You
Get Flat 40% Off
Then ₹ 1749 for 1 year
Avail OfferOffer Exclusively For You
ET Prime at ₹ 49 for 1 month
Then ₹ 1749 for 1 year
Avail OfferSpecial Offer
Get flat 40% off on ETPrime
Avail OfferAvail OfferClaim NowAlready a Member? Sign In nowNeed Assistance?
Connect with an ETPrime expert for personalized support and guidance
+91 9484700004'; }); } if(listing) { var h3 = "You tried reading " + listArr.length + " locked stories in the past " + threshold + " days.", h4 = "Become an ET Prime member and don't miss out on these exclusive stories."; var html = '' + h3 + '
' + h4 + '
- ' + listing + '
What’s Included with
ETPrime Membership
1Exclusive Insights That Matter
Uncover the truth with our investigative stories
Make strategic moves using the real-world case studies
Read industry-specific stories to identify emerging trends
Spot opportunities with in-depth insights that matter
Trump temper on H-1B visas is forcing Indians to do these things to stay put in US
What Adani’s US indictment means for India Inc’s overseas fundraising
Why veterans like Reliance, L&T are on acquisition spree? Aswath Damodaran has an answer.
Will China’s dollar bond sale in Saudi Arabia trump the US in financial world?
Huawei launches its own OS to compete with Google and Apple. But can it win beyond China?
The problem with lab grown diamonds
Why a falling rupee is a better option for the economy
A list of top 20 momentum stocks that have delivered massive returns in one year
2Invest Wisely With Smart Market Tools & Investment Ideas
Alpha Trade
Get daily trade ideas from SEBI-registered research analysts.
Investment Ideas
Grow your wealth with stock ideas & sectoral trends.
Stock Reports Plus
All-in-one stock research with Stock Score, peer comparison & key signals.
BigBull Portfolio
Get to know where the market bulls are investing to identify the right stocks.
Stock Analyzer
Check the score based on the company's fundamentals, solvency, growth, risk & ownership to decide the right stocks.
Market Mood
Analyze the market sentiments & identify the trend reversal for strategic decisions.
Stock Talk Live at 9 AM Daily
Ask your stock queries & get assured replies by ET appointed, SEBI registered experts.
3Stay informed anytime, anywhere with ET ePaper
ePaper - Print View
Read the PDF version of ET newspaper. Download & access it offline anytime.
ePaper - Digital View
Read your daily newspaper in Digital View & get it delivered to your inbox everyday.
Wealth Edition
Manage your money efficiently with this weekly money management guide.
TOI ePaper
Read the PDF version of TOI newspaper. Download & access it offline anytime.
Deep Explainers
Explore the In-depth explanation of complex topics for everyday life decisions.
Health+ Stories
Get fitter with daily health insights committed to your well-being.
Personal Finance+ Stories
Manage your wealth better with in-depth insights & updates on finance.
5Enjoy Complimentary Subscriptions From Top Brands
Stream new documentaries from all across the world every day.
Stories you might be interested in
Figures reflect the source report and its stated period. This article is for information and is not investment advice.
