JAPAN

The flow of capital in Japan declined last year for the first time in several years, the Bank of Japan said. Caution in lending by financial institutions was one reason for the turnaround in the flow of capital. Another was a slowdown in asset-price growth resulting from the Bank of Japan’s tight grip on credit. The report also traced the decline in the domestic flow of funds to financial institutions putting greater emphasis on profitability and the need to hedge risks in meeting capital-adequacy standards of the Bank For International Settlements, an agency of central banks. The report comes after the Bank of Japan’s long-awaited decision last Monday to lower its official discount rate.