Loan application increases Corporate Japan for the first time since 2009

April 20, 2011, 10: 01 am EDT by Aki Ito

(Updates with comment from Economist in the fourth paragraph).

April 21 (Bloomberg)--Japanese demand for pink Bank loans for the first time in two years as a strongest earthquake of the nation on record spurred businesses to borrow.An index of demand for business loans was at 8 in the period between March 11 and April 12, the Bank of Japan said in a survey of loan officers in Tokyo today. It was the first positive reading since April 2009, a sign demand has increased.Companies have sought funds since the disaster, causing cash in circulation increased at the fastest pace in more than five years last month. The Central Bank unveiled a program loan of one year for banks in areas affected April 7 as it grew more concerned about the risks the temblor on the third world economy. "Businesses need to borrow now to keep things like revenue plunge,"said Azusa Kato, Economist at BNP Paribas in Tokyo." "But we could attend the loan application lower if sales and production keep shrinking".Companies sought to 7.5 billion yen ($91 billion) in loans from three banks largest in the country including Mitsubishi UFJ Financial Group Inc. to cope with the disaster.Bank of Tokyo-Mitsubishi UFJ Ltd. has received applications for approximately 2.5 billion yen in loans, said Shinya Matsumoto, a spokesman for the unit of the largest bank of Japan. Sumitomo Mitsui Banking Corp., and Mizuho Corporate Bank Ltd. received requests for approximately the same amount, according to the spokesman for the lenders.The Central Bank loan application index rose 43 points in January 2009, during the global credit crisis, only to start down again in July, a sign that the current outbreak may be temporarysaid Kato. Dragged loans 1.8% in March of last year, the 16th straight drop, a sign request has not yet be reflected in the outstanding loans.Data published since the temblor indicate the slows the expansion of the nation. Exports fell by 2.2 per cent in March, the first drop in more than a year and the consumer and corporate sentiment weakened.

-Editors: Lily Nonomiya, Russell Ward

JT JPY 8306% JT 8316 JT 8411

To contact the reporter on this story: Aki Ito in Tokyo at the aito16@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst in the ppanckhurst@bloomberg.net

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