InsideJapan News Network

The rate of bank lending in Japan has fallen for the first time in years, figures from the Bank of Japan have revealed.

According to the statistics, in December 2009, bank lending fell from a year earlier for the first time in four years, which has been blamed on a still inclement economic climate and people's reluctance to borrow.

Commenting on the figures, senior fixed income strategist at Mitsubishi UFJ Securities Naomi Hasegawa told Reuters that capital expenditure in Japan is "very weak" and noted that demand to borrow money is still anaemic.

"Companies are still under pressure to cut costs, including employment and capital expenditure. Maybe in the middle of next year capital expenditure will start growing again and declines in lending will moderate," she noted.

Japan has recently emerged from its deepest recession since the end of the second world war and is also struggling with low levels of inflation and a very strong yen.

Written by Mark Smith.