TOKYO: Demand for bank lending from companies in Japan swelled in April-June, reflecting cash squeeze amid the coronavirus pandemic, a Bank of Japan survey showed Friday.

The diffusion index of corporate loan demand for major commercial banks jumped from plus 14 three months earlier to plus 59, the highest level since records began in 2000, the central bank said.

The DI represents the percentage of major banks that enjoyed stronger loan demand over the past three months minus banks that saw demand drops.

Meanwhile, the household loan demand DI tumbled from minus 7 to minus 24, the weakest reading ever, with lending substantially slowing for both home purchases and consumption at a time when bank customers tended to stay home to prevent the spread of the novel coronavirus.

The BOJ also said the outlook DI to forecast loan demand change over the next three months stood at plus 29 for companies and minus 6 for households.

Although the corporate demand outlook DI declined from plus 46 in the previous April report, it is still higher than plus 20 in the January 2009 report, released in the midst of a global financial crisis triggered by the collapse of U.S. investment bank Lehman Brothers in September 2008.

“Corporate loan demand is expected to remain high on the back of murky business prospects,” a BOJ official said.

The latest survey was conducted between June 9 and July 8, covering the country’s top 50 banks in terms of outstanding lending.

JIJI Press