Lending by Japanese banks grew at a slower pace for the third straight month as confidence among manufacturers fell to a record low and unemployment hit a three-year high.
Loans, excluding those by credit associations, rose 3.6 percent from a year earlier after climbing 3.8 percent in February, the Bank of Japan said Friday. Lending by the 10 so-called city banks, including Mitsubishi UFJ Financial Group Inc., rose 3 percent after climbing 3.2 percent in February.
The economy is headed for its worst recession in six decades as a record decline in exports forces companies to cut back on investments, squeezing demand for funds. The Bank of Japan's decision to buy commercial paper from companies has also helped them access funding in the market, BOJ Gov. Masaaki Shirakawa told reporters this month.