MNI POLICY: BOJ Survey: Corporate Loan Demand Flat, H'holds Up

     TOKYO (MNI) - Japanese corporate demand for financing via bank loans in

October was unchanged from three months ago, supporting the Bank of Japan view

that financial conditions are accommodative, according to the Bank of Japan's

quarterly survey of senior loan officers at 50 banks released Monday.

     The index for corporate fund demand -- calculated by subtracting the number

of banks reporting a decline in lending from the number of those reporting an

increase -- stood at +2 in October, unchanged from July and just below April's

+3. The latest survey period was from September 11 to October 11.

     Other key points from the latest survey;

     --The index for demand from large companies rose to +4 from +zero while the

index for small businesses rose to +4 from +1.

     --The index for fund demand expected for the next three months stood at +1,

down from +4 in the previous survey.

     --The index showing household demand for funds rose to zero in October from

-2 in July due to higher housing investment and consumption, as well as the drop

in lending rates.

     --The senior loan officer index for corporate fund demand hit a record high

of +43 in the October-December quarter of 2008, up from -5 in the previous three

months. The global financial crisis hurt companies' ability to borrow directly

from financial markets. The BOJ began the survey in April 2000.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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