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Flow of funds for Q2/CY2010: continued expansion in the private sector’s financial surplus

- Flow of funds for Q2/CY2010: continued expansion in the private sector’s financial surplus
• "Amid the remaining uncertainty about the economic outlook, Japanese firms have continued to favour debt restructuring"
• "Importantly, their appetite for liquid financial assets, i.e. cash and deposits, has remained robust, constraining business fixed investment"
• "Foreign direct investments, such as direct and portfolio investment, have continued to increase and are now 11.5% of total financial assets, the highest level since 3Q08"
• "The financial surplus in the private sector, including households and depository financial institutions, amounted to 46.5 trillion yen (40 trillion yen in Q1/CY2010), well exceeding the government sector’s financial deficit of 34.7 trillion yen"
- Another drop in manufacturers’ capacity utilization
• "Capacity utilization rate among manufacturers dropped for the second consecutive month to the lowest level since last December"
- Demand for Funds Remains Weak
• "Bank lending continued to drop, falling 2.0%yoy in August, reflecting the weak demand for funds among the private corporate sector"




CreditSuisse Japan Economics Weekly 20100924

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