BOJ survey shows flat loan demand, highlighting fragile Japan growth and cautious outlook

The BOJ Senior Loan Officer Survey (March–April) shows loan demand broadly flat across firms, households and local governments, with credit conditions stable and only a slight rise in loan rate spreads. The read suggests fragile domestic momentum — manufacturing holds up while smaller firms and consumer lending remain weak — reinforcing a cautious, gradual BOJ normalisation rather than aggressive tightening. Market implications: limited upside for the yen amid persistent policy divergence, muted prospects for a strong cyclical rebound in Japanese equities, and continued caution among investors pricing a measured BOJ tightening path.