FINWIRES · TerminalLIVE
FINWIRES

Japanese Bank Lending Jumps 5.7% in May, Topping Forecasts

By
Japanese Bank Lending Jumps 5.7% in May, Topping Forecasts

Japanese bank lending in May grew the fastest since March 2021 on higher growth in major banks, according to data from the Bank of Japan released Monday.

Bank lending in the country jumped 5.7% year over year in May, faster than the 5.4% rise in April and above the 5.6% forecast by Trading Economics.

Total outstanding loans at major, regional, and shinkin banks reached 670.8 trillion yen during the month.

Loans at major banks jumped 8.7% year over year, with 275.3 trillion yen in outstanding loans. The growth was faster than the 7.9% rise reported in April, the central bank said.

Regional bank loans grew 4.3%, faster than the 4.2% increase in April. Total outstanding loans were at 316 trillion yen.

Lending at major and regional banks combined rose 6.3% during the month, accelerating from 5.9% in April. Total outstanding loans as of May were at 591.4 trillion yen.

Shinkin banks or cooperative-owned financial institutions saw loan growth at 1.7%, higher than the 1.5% increase seen a month ago, with total outstanding loans at 79.5 trillion yen.

The heightened lending activity comes as businesses in the country boost borrowing to cover cash shortfalls due to mergers, capital investments, and investor pressure, Bloomberg reported separately the same day.

Total deposits inched up 2.1% year over year in May, faster than the 1.9% growth in April. Total outstanding deposits were at 1.0826 quadrillion yen.

City and regional bank deposits increased 2.4% year over year, with outstanding deposits of 920 trillion yen in May.

Investment bank Jefferies said its impression of Japanese loans and deposits is positive due to stronger growth compared with the previous month, according to a report released Monday.

Related Articles

Nasdaq Suffers Worst Day in More Than a Year; S&P 500 Snaps Winning Weekly Streak
US Markets

Nasdaq Suffers Worst Day in More Than a Year; S&P 500 Snaps Winning Weekly Streak

The Nasdaq Composite logged its biggest one-day decline since April 2025 as traders evaluated the official jobs report, while the S&P 500 snapped its winning weekly streak.The technology-heavy Nasdaq plunged 4.2% to 25,709.4 on Friday, the most since April 2025, according to CNBC. The S&P 500 shed 2.6% to 7,383.7, while the Dow Jones Industrial Average lost 1.4% to 50,866.8, after it closed at a record high in the previous session.Tech saw the steepest drop among sectors, shedding 5.8%, while consumer staples paced the gainers.All three major Wall Street indexes posted weekly losses, with the Nasdaq sliding 4.7% and the Dow slipping 0.3%. The S&P 500 is down 2.6% on the week, after nine straight weekly gains.Cisco Systems (CSCO) declined 6.4% on Friday, the worst performer on the Dow. Nvidia (NVDA) and IBM (IBM) followed Cisco on the index, down 6.2% and 5.6%, respectively.Qualcomm (QCOM), Advanced Micro Devices (AMD), Super Micro Computer (SMCI), and Micron Technology all tumbled more than 10% each, with Micron the worst performer on the S&P 500. Oracle (ORCL), Salesforce (CRM) and Microsoft (MSFT) also closed lower.In economic news, total nonfarm payrolls in the US rose by 172,000 in May, the Bureau of Labor Statistics said, nearly double the 88,000 increase expected in a Bloomberg-compiled survey."Overall, this was a solid employment report," TD Economics said in a report. "Not only did headline payrolls come in stronger than expected, but revisions to prior months were meaningfully higher and well above six-and-twelve-month averages, suggesting some reacceleration in hiring activity."US Treasury yields were higher, with the 10-year rate last up 6.6 basis points at 4.55%, and the two-year rate soaring 11.9 basis points to 4.17%.Markets widely expect the Federal Reserve to leave interest rates unchanged later this month, but the odds of monetary policy tightening later this year have seemingly increased."Despite the lack of consistent messaging in the labor market data, we now have a rate hike fully priced at the December (Federal Open Market Committee) meeting," James Knightley, chief international economist at ING, said in a note. "That is understandable given the Fed's hawkish pivot and the hot inflation prints of recent months."West Texas Intermediate crude oil was down 2.9% at $90.38 a barrel in Friday late-afternoon trade, while Brent fell 2% to $93.11.Major oil-producing nations belonging to the OPEC+ cartel are expected to agree to continue raising output when they meet on Sunday to decide on July's production quota, analysts told.The cartel is seen lifting July's production quota by another 188,000 barrels per day, DBS Bank's Suvro Sarkar said.Gold was last down 3.7% at $4,338.30 per troy ounce, while silver dropped 8.4% to $67.79 per ounce.

$^DJI$^IXIC$^SPX$AMD$CRM$CSCO$IBM$MSFT$MU$NVDA$ORCL$QCOM$SMCI
OPEC+ Countries Likely to Continue Raising Output in July, Analysts Say
US Markets

OPEC+ Countries Likely to Continue Raising Output in July, Analysts Say

A group of major oil-producing nations is expected to continue raising output when they meet on Sunday to decide on July's production quota, analysts told.After hitting a pause on production hikes for the first quarter of 2026, several countries from the OPEC+ cartel resumed output increases, beginning with gains of 206,000 barrels per day in April and May. They dialed down the pace to 188,000 barrels for June.The cartel is seen lifting July's production quota by another 188,000 barrels per day, DBS Bank's Suvro Sarkar said.The United Arab Emirates ended its more than five decades of the Organization of the Petroleum Exporting Countries' membership in May."The first meeting after UAE exit had already set the template, as they went for a (188,000 bpd) increment, essentially adjusting for UAE's exit, but not addressing it upfront," Sarkar said. "We can expect similar increment this time as well."West Texas Intermediate crude oil was down 3% at $90.22 a barrel in Friday late afternoon trade, while Brent fell 2.2% to $92.93. The benchmarks were on track for weekly gains following two successive weekly declines."Given oil is trending close to $100 (a barrel), there's no pressure as such on OPEC to pause," Sarkar said. "The increases are mainly on paper at this stage and the unwinding suits Saudi's strategy of defending market share while prices remain elevated from the war premium."Amena Bakr, head of Middle East energy and OPEC+ research at Kpler, expects an adjustment of around 188,000 barrels per day or 190,000 barrels per day.But Bakr echoed views that higher supply won't actually hit the market, given the Strait of Hormuz's effective closure."Even if the strait opens, it's going to take months for us to see production being restored to pre-war levels," Bakr toldin an interview.The Strait of Hormuz, the world's most important chokepoint for crude flows, has remained effectively shut since the US-Iran conflict started at the end of February, even as a ceasefire continues to hold.Last month, OPEC reduced its global oil demand growth outlook for 2026, but upgraded its projection for next year. In a separate report, the International Energy Agency forecast a sharper decline in global oil demand this year than previously expected as the Middle East conflict drove up energy prices.

Strong Jobs Report Increases Fed Rate Hike Probability in 2026 Amid Inflation Concerns, Redfin Says
US Markets

Strong Jobs Report Increases Fed Rate Hike Probability in 2026 Amid Inflation Concerns, Redfin Says

A stronger-than-expected jobs report for May has increased the odds of monetary policy tightening by the Federal Reserve later this year as inflation remains elevated, Redfin said Friday.The US economy added 172,000 nonfarm jobs last month, official data showed Friday, almost double the 88,000 increase expected in a Bloomberg-compiled survey. The unemployment rate was steady at 4.3%, which matched Wall Street's projection."This (jobs) report does not look strong enough to push the Fed into hiking right away, especially with wage growth still gradually easing," Redfin said. "But combined with recent inflation data, it makes it easier for the Fed to move further away from an easing bias and toward a more balanced stance where the next move could plausibly be a hike."Last week, government data showed that the US personal consumption expenditure price index jumped 3.8% year over year in April, the largest print since May 2023, even as consumer spending moderated in the face of high gasoline prices. PCE inflation, which excludes the volatile food and energy components, accelerated to 3.3% last month from 3.2% in March.Last month, minutes of the central bank's Federal Open Market Committee's April meeting showed that policymakers flagged the possibility of higher interest rates if the Middle East conflict keeps inflation above their 2% goal."With this (jobs) data, economists are now gradually moving their forecasts to expect hikes, and futures markets are now pricing in a rate hike by the end of this year and potentially another one next year," Redfin said Friday. "However, it is also worth remembering that payroll growth has had a strong seasonal tendency to decelerate in the summer months over the last few years."Although the latest jobs data increase the probability of interest rate hikes, "it is too soon to treat this strength as the new normal," the online real estate brokerage said.Markets widely expect the FOMC to leave interest rates unchanged later this month, which would mark its fourth straight pause, according to the CME FedWatch tool.