Riffrag Business & Finance Report

Distribution of bank credit in Japan fell for the first time in 4 years in December after the company cut spending or issuing bonds.

Bank of Japan reported credit, not including joint credit, down 1.2% last month from a year earlier, after the November rose 0.1%. 10 credits from Japan called city banks, including Mitsubishi UFJ Financial Group Inc., fell 3.1% 1.3% continuing decline in the previous month.

Shiseido Co., Orix Corp., and Mitsubishi Heavy Industries Ltd including financial institutions that issue bonds in December. Meanwhile, the reluctance of small businesses to apply for credit to banks threaten efforts AM Yukio Hatoyama to boost growth.

“If you look at the size of the company, demand for loan funds are also weak. That’s what the banks. Financing of the larger banks, which clients can issue credit, the fall until the market returned to normal,” said Yoshihiro Komaki, director Financial Systems and Bank Examination Department, Bank of Japan, today.

Loan growth last year slowed every month until November after a greatest jump in 16 years by 4.1% in December 2008. Monthly decline in loan disbursement first time since December 2005.

Mitsubishi UFJ, Japan’s largest bank by market value, fell 0.2% to 477 yen at 10:41 am in Tokyo. Sumitomo Mitsui Financial Group Inc., ranked 2, down 1.3% and Mizuho Financial Group Inc. slipped 2.8%. Today, the Topix Banks Index dropped third largest in the stock market.

“The decline of credit was part of the credit market conditions are more normal. Globally, small firms worst affected due to the drying up of liquidity during the crisis,” said David Cohen, director of Action Economics in Singapore responded to the statement of the Bank of Japan.

Data showing the issuance of bonds in Japan rose 30% to 11.4 trillion yen (U.S. $ 123 billion) in 2009, from 8.8 trillion yen the previous year.

Cabinet Office in December reported Japan’s economic expansion to reach 1.3% annually during the third quarter.

Robert Feldman, head of economic research at Morgan Stanley Tokyo, said the GDP predicted to experience a moderate expansion during 2010 driven by foreign demand.

The company PT Central shrimp protein Prima Tbk (CPRO) failed to pay interest on bonds subsidiary, Blue Ocean Resources Pte Ltd, for 17.9 million U.S. dollars.

The Company stated that the reason for failure to pay financial performance and decrease in shrimp ponds have a virus, so CPRO Company Secretary Albert Sebastian in disclosure of information, Monday.

Decreased performance and a virus that attacks the mine was owned by Blue Ocean shrimp are expected, so the company had done, including cleaning, sanitation pond cultivation and water treatment facilities.

Blue Ocean has preached the global bond issue worth 325 million U.S. dollars on June 28, 2007.

These bonds will mature next June 28, 2012 and determined rates 11 percent per year, while the interest coupon payment every year on June 28 and December 28.

The Company failed to pay interest on the bonds for the date December 28, 2009 for 17.9 million U.S. dollars so the rating agency Fitch downgraded the bond rating from CC to C

Fitch’s rating also concerned about the inability of the company to pay interest on bonds.

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Consumer Credit in the U.S. plunged a record U.S. $ 17.5 billion in November after the unemployment rate close to the highest position in 26 years and banks restrict credit access.

According to the Federal Reserve reports consumer credit decline exceeds the October projection of U.S. $ 4.2 billion. With the decline of consumer credit to U.S. $ 2.46 trillion. While the median estimate of economists fell U.S. $ 5 billion.

Consumer credit was recorded using a credit card and other types such as the purchase of motor vehicles.

Number of workers fell 7.2 million since the recession began in December 2007 erode consumer spending. Fed policy tightening credit standards and reduced credit lines holding recovery.

“Unemployment is achieving double-digit erode consumer confidence and uncertainty caused the credit card payment delays. It’s never happened before credit card decline since the recession of the 80s,” said Chris Rupkey, chief financial economist of Bank of Tokyo-Mitsubishi UFJ Ltd. New York.

Consumer loans decreased 10 times in a row is the longest since 1943.

The Fed said revolving credit such as credit card down the largest U.S. $ 13.7 billion during November. While non-revolving debt, including auto loans and home run, off of U.S. $ 3.8 billion. The report did not mention the credit for real estate.

Automotive sales in the U.S. rose during November to 10.92 million, from 10.45 million in October.