The Bank of Japan's July survey of senior loan officers showed the corporate funding demand diffusion index fell to minus 1, down from plus 4 in the previous April survey. This marks the first negative reading since October 2021. Of the 50 financial institutions that responded, 43 said funding demand was flat, three reported a slight increase, and four noted a slight decrease. The BOJ decided to raise its policy rate to 1 percent on June 16, during the survey period, and the additional rate hike may have had some impact. By firm size, demand from large, medium-sized, and small firms all declined from the previous survey. The household funding demand DI also worsened to plus 3 from plus 5. Looking ahead three months, the corporate DI is forecast at plus 4, below the previous outlook, while the household DI is expected to improve to plus 1.