* Japan bank lending slows as funding strains ease
* European sentiment improves
* OECD sees decline slowing
* China bouncing back, Reuters poll says
(For more on the global crisis, click)
By Tetsushi Kajimoto and Angus MacSwan
TOKYO/LONDON, June 8 (Reuters) - A drop in Japanese bank lending and a slower pace of decline in the OECD economic outlook offered further signs on Monday that the world recession was easing in several countries.
Global policymakers have suggested recently that the economy was stabilising after the worst crisis in six decades. But some economists say rising unemployment and banks' continued reluctance to lend would temper any future recovery.
The slowing of growth in Japanese bank lending to a seven-month low in May signalled that firms were finding it easier to obtain funds via the capital markets, which froze when the global financial crisis hit.
Sentiment among euro zone investors improved in April, largely due to foreign factors including better prospects in Asia, the Sentix research group said.
And a survey by the Paris-based Organisation for Economic Co-operation and Development, a grouping of 30 developed nations, said its economic outlook declined at a slower pace in April and there were stronger indications that the downturn may have hit bottom in Canada, France, Italy and Britain.
"While it is still too early to assess whether it is a temporary or a more durable turning point, OECD composite leading indicators (CLIs) for April 2009 point to a reduced pace of deterioration in most of the OECD economies," the OECD said.
In Japan, Germany and the United States, positive signals were also emerging, the OECD said, although the leading indicators still pointed to a slowdown.
German manufacturing orders held steady in April after a big increase in March, the Economy Ministry said. Orders had fallen nearly every month since the end of 2007 until March 2009.
Financial markets in Asia benefited from Friday's U.S. data showing employers cut 345,000 jobs in May, the fewest since September and far lower than an expected 520,000 drop.
The U.S. data helped lift Japanese shares 1 percent to an eight-month closing high but European shares fell 1.2 percent.
"Money is flowing into assets such as commodities and stocks as risk tolerance has steadily improved on the back of hopes for a recovery. But we are still not in a position to be overly optimistic over the medium to long term," said Takahiko Murai, general manager of equities at Nozomi Securities in Tokyo.
U.S. stock futures pointed to a lower open on Monday.
JAPAN RISING?
Japanese companies, many of which rely heavily on exports, have been hit hard by the crisis as demand collapsed.
Lending data showed on Monday the balance of outstanding loans held by Japanese banks rose 3.1 percent in May from a year earlier, the smallest increase since October. That indicated companies were finding it easier to raise funds in capital markets, which had fallen into a deep freeze last year leaving firms to rely heavily on banks for loans.
In another sign the Japanese economy may be bottoming out, the rate of corporate bankruptcies fell year-on-year in May for the first time in 12 months and service sector sentiment rose to a one-year high.
China's growth slowed to 6.1 percent in the first quarter of 2009, the lowest on record, although the government is optimistic of hitting its 8 percent growth target for the year.
A Reuters poll showed China's industrial output growth probably bounced back in May, led by a surge in government investment. Retail sales also picked up, showing the economy is recovering even if the pace may be slower than some had hoped.
Investors will likely focus this week on a deluge of Chinese economic data for clues on whether consumer demand for Asian goods is strengthening in major Western markets, and if Chinese domestic demand is holding up despite weak exports.
In Britain, one of the worst-hit developed nations due to its long housing and credit booms and reliance on the financial services sector, 11 out of 20 economists surveyed by the Financial Times thought the economy had stopped contracting in June and would start growing in coming months.
BANKING ON BANKS
European Union finance ministers believe their bank support schemes have helped stabilise the sector but more recapitalisation or balance sheet clean-ups may be necessary.
"Together with central banks' actions, these measures have been instrumental in preserving financial stability and are contributing to the ongoing trend towards a more normal functioning of financial markets," said a draft report to be presented to an EU leaders summit later this month.
In the British banking sector, Lloyds Banking Group said on Monday it had raised just under 3.5 billion pounds ($5.56 billion) from shareholders which it will use to pay back some of the money injected by the British government last year.
Barclays Plc said it was in talks to sell Barclays Global Investors (BGI). U.S. fund manager BlackRock and Bank of New York Mellon are both suitors, according to people familiar with the matter.
Standard and Poor's cut Ireland's sovereign credit rating again on Monday and said it could fall more because of concern about the cost of bailing out the former Celtic Tiger's banking sector. Ireland is now rated at "AA" with a negative outlook. It had a precious "triple-A" rating only three months ago. (Reporting by Reuters bureaux worldwide; Writing by Angus MacSwan; Editing by Mike Peacock)