29/05/2026

BIZ & FINANCE FRIDAY | MAY 29, 2026

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Japanese lenders battle to secure deposits

ByteDance said to be developing CPU chips to support AI rollout BEIJING: Chinese technology giant ByteDance is developing its own central processing units (CPUs) to support its growing AI infrastructure needs, three people familiar with the matter said, as surging chip prices and prolonged supply shortages constrain its expansion plans. The move underscores the industry’s rapid shift toward “inference,“ where AI models are deployed to perform agentic tasks that demand more from CPUs, working in tandem with the graphics chips made by Nvidia that have dominated the AI boom. The shift has created a shortage of CPUs in recent months,and global hyperscalers including Alphabet’s Google, Amazon and Microsoft are also developing their own custom CPUs to reduce costs and tailor performance to their specific workloads. It has also helped major CPU makers Intel and AMD emerge as leading challengers to Nvidia’s AI dominance. ByteDance, the parent of short video platform TikTok, is targeting deployment of its proprietary CPU in its own servers and data centres to support internal operations, as it prepares a massive rollout of agent-based products including its Coze platform, the first source said. The Beijing-based firm has approached several external partners to assist with the effort, and those partners are expected to contribute not only to the chip’s design work but also to help secure manufacturing capacity at foundries, the sources added. The project remains at an early stage, the first source said. ByteDance’s move places it alongside a growing cohort of tech companies that have concluded the economics of custom chips outweigh the complexity of designing them. It is pursuing two chip architecture tracks for its CPU development – one based on SoftBank-owned Arm and another on the open-source RISC-V instruction set architecture, as it weighs which design best suits its long term data centre requirements, the sources said. Developing two designs simultaneously is a common hedge for technology giants, as it allows them to test their options before committing to a costly, large-scale manufacturing run. Arm did not respond immediately to a request for comment. The push to develop proprietary silicon comes as Intel has warned Chinese customers of server CPU delivery lead times of up to six months, Reuters reported in February. Intel said last month that demand for its CPU from AI firms was so strong in the first quarter that it sold even chips it had originally written off. AMD CEO Lisa Su warned last week that the global CPU market is “tight,“ with demand outpacing forecasts and supply constraints expected to persist. ByteDance currently sources CPUs from Intel and AMD, and they have raised prices significantly, with quarter-over-quarter increases ranging from 10% to as much as 35% in recent months, two of the sources said, prompting ByteDance to accelerate its push for in-house alternatives. Intel said it had updated prices on some of its products to reflect sustained demand, increased component and material costs and evolving market dynamics. AMD did not respond immediately to a request for comment. Nvidia is expanding beyond GPUs into the CPU market, and its CEO Jensen Huang hopes its new “Vera” central processors will give the firm access to a new US$200 billion market. It unveiled a new central processor and AI system built on technology from Groq – a chip startup specialising in inference – in March, making moves to defend its position in the AI chip market. – Reuters

Mitsui Financial Group (SMFG) CEO Toru Nakashima. “Going forward, we will have to be a bit more selective about lending than we had been in the past,” he said. To secure deposits, SMFG is rolling out “Olive” retail accounts that integrate securities and payments functions. Mitsubishi UFJ Financial Group has similarly launched its “Emut” service. SMFG is also establishing a company with US asset manager Neuberger Berman to invest in domestic leveraged buyout debt, aiming to disperse risk by attracting funds rather than holding loans on its books. In April, Mizuho Financial Group issued dollar-denominated straight bonds to secure funding. Banks are also focusing on transaction banking, offering services such as payments and cash management to capture companies’ daily cash flow. While household assets were previously left untouched, a virtuous cycle of wages and prices has emerged and the investment mindset of individuals has started to change, said Mizuho CEO Masahiro Kihara. With the productivity improvement from AI and progress in industrial restructuring, “a very good opportunity has arrived to enhance the competitiveness of Japanese industry”, he said. – Reuters

accounts more than doubled over the two years to the end of 2025 to reach ¥71 trillion yen (RM1.7 trillion). Japan’s benchmark index has hit record highs, supported by an AI-driven investment boom and governance reforms that have helped the market shed its reputation as a value trap where companies care little about shareholder returns. “I’m interested in some more adventurous stocks like AI-related companies, but would only invest in a few years’ time once I get a promotion and have more money to spare,” Fujiwara said. Junya Oki, a 28-year-old hairdresser, said he started investing about a year ago to save for retirement and has put money into the S&P 500 and global index funds. “Since I got a raise I have money to spare so I want to put it to use,” he said, near Shimbashi station in central Tokyo. The ratio of loans to deposits at Japanese banks rose to 65.7% at the end of September 2025, the highest since March 2020, according to calculations by Tokyo Shoko Research. Rising rates and corporate investment in areas such as semiconductors, data centres and decarbonisation are creating growing opportunities for banks to lend domestically. “We had a surplus of deposits so our approach had been to lend more and more when there was demand,” said Sumitomo

TOKYO: Japanese banks are, in a historic shift, competing to shore up their deposit base as lending opportunities grow and consumers, seeking to beat inflation, shift their savings into a booming stock market. While banks had been able to count on ample deposits for decades, growing prospects domestically are pushing them to get creative or risk having to put a brake on lending. Interest on deposits is rising as the Bank of Japan gradually raises rates, but consumers are also seeing inflation eating into their savings after decades of deflation. The government has been encouraging savers to make household cash more productive, including through the “NISA” tax-free stock investment programme, which was expanded in 2024. “Investing through NISA is seen as safe, it’s considered a part of savings,” said Yohei Fujiwara, 30, who works for an airline and has invested in infrastructure and electric-related companies in Japan. The amount invested through NISA o Consumers seek to beat inflation by shifting savings into booming stock market The People’s Bank of China issued the informal guidance to some major state-owned banks last week as household and corporate loan demand has remained weak this month after lending unexpectedly fell in April, the sources said. The sources asked not to be named as they were not authorised to speak to the media on the subject. China’s monthly credit data is closely watched as a barometer of activity in the world’s second-largest economy. The PBOC did not immediately respond to a request for comment. The PBOC’s May “window guidance” has not been reported previously and is not a routine procedure. The bank issued similar instructions last month, Reuters reported at the time. Despite those instructions, new yuan loans contracted in April for the first time in nine months, sharply undershooting forecasts as seasonal factors and weak household demand for credit dragged on lending. China’s economy expanded 5% in the first quarter, the upper end of Beijing’s full-year target range of 4.5% to 5%. However, growth is showing signs of losing momentum early in the second quarter. While a protracted downturn in the property market remains a drag on growth, the three-month-old US-Israeli war on Iran has driven energy costs higher and exposed China’s economy to external risks at a time of fragile consumption at home. The housing downturn has eroded household confidence, while fragile private-sector investment appetite has further dampened credit demand across the economy. As policymakers shift support to technology and green energy from traditional

PBOC tells China banks to boost May lending BEIJING: China’s central bank has instructed banks to boost lending this month, people with knowledge of the matter said, underscoring Beijing’s continued efforts to support an economy squeezed by higher energy costs and stubbornly weak domestic demand.

People are seen in front of an office building of Agricultural Bank of China in Beijing. – REUTERSPIC

economy, banks have had to purchase short term commercial bills to hit their lending targets, the source said. Still, analysts do not expect the PBOC to rush into policy easing as inflation pressures build. In January the PBOC cut sector-specific interest rates by 25 basis points, targeting areas such as small firms, tech innovation and green development. Financial News , a publication run by the PBOC, said after the weak April data that the market should view the credit-growth slowdown “with a mature and rational mindset”. It said direct financing has accelerated in recent years, with total social financing maintaining reasonable growth even as loans’ share in new financing has steadily declined. – Reuters

infrastructure and property, credit demand in the new areas remains insufficient to support overall lending volumes, one source said. Complicating the picture, banks have been tightening loan issuance to small and midsize private firms, given rising loan defaults, the sources said, further constraining credit flow to parts of the economy. Banks have also responded to rising household defaults by tightening lending standards, reducing the credit supply to people who have not defaulted, Xiaoxi Zhang at Gavekal Dragonomics wrote in a research note on Wednesday. “While regulators may want banks to expand consumer credit, they also want banks to maintain risk controls, and that still seems more important,“ she said. Due to weak credit demand from the real