Japan’s Fiscal Loan Fund, the account through which the fiscal investment and loan programme lends, ended September with a balance sheet of 119,252.9 billion yen, the Ministry of Finance said on Tuesday. The total fell 886.0 billion yen from the end of August and 4,202.3 billion yen from the end of the previous fiscal year.
Loans are almost the whole asset side, at 116,985.8 billion yen or 98.10 percent of the total, down 2,046.0 billion yen on the month. Loans to special corporations are the largest block at 46,800.9 billion yen, followed by local governments at 37,242.0 billion yen, which fell 1,863.0 billion yen in September, government related institutions at 23,932.4 billion yen, and the general and special accounts at 9,010.6 billion yen. Cash and deposits rose 1,160.0 billion yen on the month to 2,267.1 billion yen, and the fund held no securities at month end, its government bond holdings having run down by 3,499.7 billion yen since the fiscal year began.
Funding moved in the opposite direction to the loan book. Deposits rose 4,219.0 billion yen on the month to 33,113.5 billion yen, led by special account deposits at 22,910.8 billion yen, while fiscal loan fund bonds outstanding fell 3,144.3 billion yen to 85,305.0 billion yen, down 5,501.1 billion yen since the fiscal year began. The fund is borrowing less from the bond market as its lending shrinks, a slow structural reduction in one of the Japanese state’s parallel funding channels that runs alongside, and largely unnoticed by, the JGB auction calendar that produced a record demand 20 year sale the same morning.