Lending by Japanese banks fell 4.5 percent in June from a year before, down for the 54th month in a row, the Bank of Japan said Monday.

The average daily lending balance for the month came to 423.58 trillion yen, the central bank said in a preliminary report.

The drop was attributed to weak fund demand from businesses for new investment and the reluctance of banks to lend because of their focus on disposing of bad loans, analysts said.

The figures cover banks with nationwide branch networks known as city banks, long-term credit banks, trust banks, regional banks and second-tier regional banks.

When adjusted for special factors -- loan securitization, exchange-rate fluctuations and the allocation of loan-loss reserves -- lending by banks fell 2.5 percent to 432.53 trillion yen in June, down for the 45th straight month, the BOJ said.

On an unadjusted basis, the June average daily lending balance, including "shinkin" savings and loan banks, fell 4.4 percent to 485.83 trillion yen, down for the 18th consecutive month.

The unadjusted balance at city banks, long-term credit banks and trust banks fell 7 percent to a combined 250.29 trillion yen, while that at regional banks inched down 0.4 percent to 130.26 trillion yen.

The lending balance fell 1.5 percent to 43.02 trillion yen at second-tier regional banks and 3.6 percent to 62.26 trillion yen at shinkin banks.

The daily balance of real deposits and certificates of deposit at city banks, regional banks and second-tier regional banks rose 1.8 percent in June to 481.78 trillion yen, the BOJ said. The outstanding balance of commercial paper at the end of June rose 5.8 percent to 22.16 trillion yen.

The balance of lending at foreign banks operating in Japan surged 23.6 percent to 9.31 trillion yen.