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Loose lending keeps Japan's 'zombies' shambling along

Ultralow rates and tough competition force banks to take more risks

The Bank of Japan's monetary easing policy has distorted the country's lending market.   © Reuters

TOKYO -- Fueled by an economic recovery and ultralow interest rates, Japanese banks are ramping up lending to small and midsize businesses -- even "zombies" that are barely surviving with little hope of repaying their debt.

Total domestic loans by Japanese companies came to 504.4 trillion yen ($4.59 trillion) as of the end of 2018, the highest figure since 1997, according to data released Friday by the Bank of Japan.

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