Japanese bank lending slowed to 5.4 percent in July, and foreign banks lending yen inside Japan grew at 28.3 percent
Five point four percent. That is how fast lending by Japan's major, regional and shinkin banks grew in the year to July, and it is the first easing in that series since the spring.
The Bank of Japan released the figures at ten to nine on Monday morning in Tokyo. Growth ran at 4.6 percent in the first quarter of 2026, 5.6 percent in the second, then 5.7 percent in both May and June. July came in at 5.4. The stock of lending it is measured against is 679.2 trillion yen.
The move is at the top
Almost all of the slowdown sits with the ten largest lenders.
Major bank lending grew 8.0 percent on the year in July, against 8.6 percent in June and 8.4 percent across the second quarter. Regional banks did not move. Their row reads 4.2 percent in the first quarter, 4.2 in the second, 4.2 in May, 4.2 in June and 4.2 in July, which is the only row in the table that prints the same figure five times. Underneath it the first tier of regional banks holds at 4.6 percent throughout and the second tier at 2.4 percent. Shinkin banks, the cooperative lenders, went the other way and picked up to 1.9 percent from 1.7.
The fastest growth in the table belongs to the smallest line in it. Yen lending inside Japan by foreign banks rose 28.3 percent on the year, on an average balance of 7.3 trillion yen, which is roughly one percent of what the domestic banks carry. That row has been running above 24 percent all year.
Deposits are growing at a third of the pace
The second panel is quieter and one line in it is negative.
Deposits and certificates of deposit across city, regional and shinkin banks rose 1.6 percent on the year in July, on an outstanding balance of 1,074.4 trillion yen. City banks grew 2.2 percent, regional banks 1.3 percent, and shinkin banks 0.3 percent. At the second tier of regional banks the balance is falling. That row went from plus 0.5 percent in the first quarter to minus 0.1 in May, minus 0.4 in June and minus 0.5 in July.
The document carries a warning against the obvious next step, and it is worth repeating rather than working around. The two panels do not cover the same banks. Major banks in the loans table means ten institutions including three trust banks, SBI Shinsei and Aozora. City banks in the deposits table means five. The Bank states in both definitions that the aggregation targets differ, so the two growth rates describe a direction and not a subtraction.
Two other markers belong on any comparison drawn across this year. The release carries statistical discontinuities for bank mergers in January and in May 2026, affecting the major, regional and foreign bank series, and the June figures in the loans panel are flagged as revised.
The same envelope carried a different sentence
Ten minutes to nine on Monday was also when the Bank published the opinions from its 30 and 31 July policy meeting, and one of them cites the acceleration in the rate of increase in bank lending as evidence that financial conditions have stayed accommodative.
Both things are true and the dates explain why. The newest reading available to the Board at that meeting was June, when major bank lending was running at 8.6 percent and the aggregate had climbed from 4.6 percent at the start of the year. July is the first month that reads lower, and it was published after the meeting rather than before it.
