Under these circumstances, major banks are gradually becoming more active in extending loans, while carefully evaluating the credit risks involved. However, credit demand for economic activities such as business fixed investment remains weak. In addition, some firms have been trying to reduce debts using their on-hand liquidity.
As a result, credit demand in the private sector has continued to be basically stagnant, and thus private banks’ lending has remained sluggish. Corporate bond issuance has been steady. Meanwhile, CP issuance is increasing with the year-end approaching. The growth of money stock (M2+CDs) has slowed somewhat mainly due to the weakness in credit demand in the private sector.