Japan Bank Lending Declines; JAL Guarantee

123jump.com Staff
07 Dec, 2009
New York City

Japan bank lending declined 0.9% to 422.2 trillion yen in November. Tokyo office vacancy jumps to 6.4% in November. Japan foreign currency reserve assets soar to $1.1 trillion in November. Japan Airlines is likely to get a loan guarantee of as much as $7.8 billion.

[R]5:00 AM New York, 7:00 PM Tokyo – Japan bank lending declined 0.9% to 422.2 trillion yen in November. Tokyo office vacancy jumps to 6.4% in November. Japan foreign currency reserve assets soar to $1.1 trillion in November.[/R]

Japanese stock indexes rose 1.5% driven by optimism the global economy is on the mend after the U.S. Labor Department reported Friday employers shed fewer jobs in November.

Commodity stocks pared gains as gold and crude oil prices fell.

In Tokyo trading Nikkei 225 Index gained 1.5% or 145.01 to 10,167.60, and the broader Topix Index edged up 1.1% to 898.93.

In the first section of the Tokyo Stock Exchange 21.3 billion shares worth 1.4 trillion yen were traded and in the section 598 million shares valued at 5.2 billion yen changed hands.

Of the Nikkei 225 index stocks, 172 gained, 38 fell, and 15 were unchanged. Yokogawa Electric led gainers in the index shares with a rise of 8.4%.

Bank Lending Falls 0.9% to 422.2 trillion yen

Nikkei News reported that Japanese Bankers Association said today the balance of outstanding loans at 122 Japanese banks dropped 0.9% to 422.24 trillion yen at the end of November.

The report notes that lending dropped on the back of increased lending last year and improved corporate bond and commercial paper issuance.

Outstanding balance of loans at local banks fell 2.8%, dropping for the second consecutive month, while the balance at regional lenders jumped 0.9%.

In addition, the balance at second-tier regional players rose 0.5% and trust banks edged up 4.3%.

Money held in bank accounts, excluding checks and drafts, soared 2.5% year on year to 553.97 trillion yen.

Tokyo Office Vacancy Rises to 6.4% in November

Separately, the Nikkei online edition reported that a survey by CB Richard Ellis Research Institute KK said the average office vacancy rate in Tokyo’s five central wards increased 0.3 percentage points to 6.4% in November

The average asking rent for the five wards - Chiyoda, Chuo, Minato, Shinjuku and Shibuya - dropped 0.6% to 14,220 yen per 3.3 square meters.

Vacancy rate for Class S buildings, which are those that have a floor space of at least 66,000 square meters and with advanced infrastructure, advanced 0.8 points to 8.1%.

The vacancy rate in the city of Osaka rose 0.1 point to 9.9% and Nagoya climbed 0.1 point to 12.3%, while the average asking rent in Osaka fell 0.8%, to 8,710 yen per 3.3 square meters.

Reserve Assets Rise to $1.1 trillion in November

Ministry of Finance in Japan reported that the country’s foreign reserve assets climbed $17 billion to $1.1 trillion.

Foreign currency reserve stood at $1.02 billion, IMF reserve position increased to $4.4 billion and Special Drawing Rights increased to $21.5 billion.

Gold and other reserves were $28.9 billion and $406 million respectively.

Gainers & Losers

Yokogawa Electric led gainers in the Nikkei 225 index shares with a rise of 8.4% followed by increases in Jtekt Corp. of 7.5%, in Japan Airlines of 7%, in Okuma Corp. of 6.7%, and Ebara Corp. of 5.4%.

Chipmakers gained as the yen fell 4.5% to 90.77 against the dollar. Casio Computers climbed 5.4% to 725 yen and Nikon Corp. increased 5.3% to 1,734 yen.

Mitsui OSK Lines Ltd increased 2.8% to 515 yen and the company in an interview with media said that it is planning to focus more on shipping oil and LNG and less on containers.

The sharp drop in container traffic and rates is likely to cause losses of as much as $20 billion in the industry this year according to an industry report published by Drewry Shipping Consultants Ltd.

Sanyo Electric led decliners in the Nikkei 225 index stocks with a fall of 3.2% followed by losses in Nippon Express of 2.9%, in Hitachi Ltd. of 2.9%, in Kao Corp. of 2.5%, and Sumitomo Metal Mining of 2.3%.

Sumitomo Metal Mining gained as crude oil prices fell 0.5% to $76.1 per barrel and gold prices decreased 4.2% to $1,169 per ounce.

Japan Airlines Corp increased 7% to 107 yen after several news outlets in Japan reported that the airline is expected to receive a loan guarantee of 700 billion yen or $7.7 billion. The supplementary budget of $45 billion that the government is working on is likely to include the loan guarantee.