TOKYO, Feb 10 - The Bank of Japan will continue trying to improve funding to small and medium-sized businesses struggling to benefit from an export-led recovery among large manufacturers, BOJ Governor Toshihiko Fukui said on Tuesday. "We will continue trying to come up with ideas, and do various things," Fukui said in parliament when asked about efforts to boost bank lending to small firms. He did not mention any possible new steps. "In order to ensure that Japan's economic recovery becomes a sustainable one, we must make sure it is more broad-based." Data on Monday showed lending by Japan's banks and "shinkin" credit unions fell 4.6 percent in January from a year earlier, the 37th straight month of decline. Excluding credit unions, lending fell for the 73rd straight month.
Since Fukui became its governor in March 2003, the BOJ has repeatedly announced measures to get more money circulating in the economy. For example, it has relaxed the criteria under which it buys asset-backed securities and commercial paper from banks in market operations, which means banks can offset the risk of lending to small firms by securitising the loans and writing them off their balance sheets. But bank lending has continued to fall, highlighting the caution of both banks and their borrowers after the bursting of Japan's asset-inflated bubble economy of the 1980s.//