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Pick-up in loan demand suggests policy already loose enough

According to the Bank of Japan’s latest Senior Loan Officer Survey (SLOS), loan demand from firms and households jumped in Q1. The pick-up in household demand is particularly encouraging. The survey therefore adds to the evidence that the economic recovery is not being held back by problems with the cost or availability of credit, although this will not ease the political and market pressure on the Bank of Japan to loosen monetary policy even further.

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