In July, Japanese bank lending increased by 1.8% from a year earlier in the year, as some companies borrowed more to meet rising raw material costs due to a surge in global commodity inflation.
Outstanding loans held by the country's four main banks, including shinkin or credit unions, hit a record 588.232 trillion yen $4.36 trillion Bank of Japan BOJ data on Monday.
A BOJ official told a press conference that the increase, after a revised 1.2% gain in June, was due to rising fund demand for property investment as well as mergers and acquisitions.
Companies were boosting lending in order to meet rising raw material costs and a re-opening of the economy as curbs to combat the COVID 19 epidemic are lifted, the official said.
The data shows that the total lending of major and regional banks increased by 2.1% in July from a year earlier in the year, from a 1.5% gain in June to the fastest year-on-year increase since May 2021, according to the data.
The data is closely watched by the BOJ in deciding whether to end a pandemic-relief loan scheme that aims to easing a credit crunch among small firms when it ends in September.