Japanese companies' demand for funding has soared since the March 11 earthquake and tsunami, both in terms of new loan requests from the country's top three banks and commercial paper issues, Nikkei newspaper reported on Sunday.
Companies need extra financing to repair damage to their operations in the areas worst-hit by the disaster as well as fund their day-to-day operations, the paper said. It said Sumitomo Mitsui Banking Corp, Mizuho Corporate Bank and Bank of Tokyo-Mitsubishi UFJ have received requests for new loans totalling 2.6 trillion yen ($32 billion)over two weeks.
The total includes 1.4 trillion yen in emergency funds sought by Tokyo Electric Power Co the operator of the stricken Fukushima nuclear plant north of Tokyo. Even excluding that number, requests were running at four times the usual levels, Nikkei said.
The top three banks and major trust banks are in talks to provide up to 2 trillion yen in emergency loans to TEPCO, sources said last week. The total is equivalent to 3 percent of the overall outstanding loans to major corporations by all Japanese banks, the paper said.
Nikkei cited officials at companies considering extra funding, such as Renesas Electronics Corp, Taiheiyo Cement Corp, whose plants have been damaged by the disaster and All Nippon Airways Co, bracing for a drop in demand for its passenger and cargo services.
Commercial paper issues also jumped by more than 50 percent in the first week after the disaster, with new offers totalling about 1.1 trillion yen and rates for one- to two-month paper rising above 0.2 percent from 0.11 percent before March 11. In the weeks following the disaster, the Bank of Japan has been pumping record amounts of funds into the banking system to ensure that credit keeps flowing to affected businesses and it has also increased its purchases of commercial paper.
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