Updated as of October 2005

Equipment Leasing Still in Doldrums.

The value of new leasing contracts by Japanese leasing companies reached a record high of 8,802 billion yen in 1991. In 2004, the value of new leasing contracts was 7,625 billion yen or $71.3 billion, down 13.4 percent from the 1991 peak, but up 3.3 percent from 2003.

After a considerable business slowdown in 1993 and 1994, which resulted from weakness of the post bubble economy, the leasing business resumed its growth, both in terms of contract amount and amount of leased equipment. It was supported by new capital investment in the rising private sector. But it again dipped slightly in1998, reflecting the decelerated domestic economic recovery when the value of new contracts hit bottom at 7,145 billion yen, but later started to recover in 2000.

Computers and information technology-related equipment continue to account for the largest share, 35.7 percent in value of all new contracts in 2004, but with a slight decline of 4.1 percent from 2001. A decline in average prices by approximately one-half in this category caused a decline in value while the numbers of equipment leased have been increasing over the last five years. The second- and third-largest categories are commercial-service and industrial equipment, which accounted for 15.4 percent and 13.3 percent in value respectively in 2004.

Japan's leasing firms and other non-bank-lending businesses have benefited from the 1988 deregulation of foreign exchange transactions and fund procurements. Further deregulation which has taken place since then in a broad range of financial areas has provided new opportunities for Japanese leasing businesses as well as foreign leasing businesses.