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Corporate bank lending down despite BOJ's negative rates

Loans outstanding at Japan's megabanks have shrunk for the first time in five years.

TOKYO -- The outstanding loan balance at major Japanese banks shrank in July for the first time in 45 months, signaling a weak investment appetite among businesses despite the Bank of Japan's negative interest policy.

Top commercial banks had 186.8 trillion yen ($1.83 trillion) in loans outstanding at the end of July, or 0.7% less than a year earlier, according to the Japanese Bankers Association. That balance had climbed rapidly coming out of 2012, when Abenomics kicked in. But growth began slowing around a year ago as funding demand petered out, barely remaining in positive territory with a 1.8% uptick when the Bank of Japan introduced negative interest rates in February.

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