This "bond conversion" actually, a fixed-floating interest rate swap - would protect the capital position of the Bank of Japan from increases in long-term interest rates and remove much of the balance sheet risk associated with open-market operations in government securities.
This phenomenon of weak credit activity amid the crisis is similarly observed in other economies. Results of the Q3 2020 Senior Bank Loan Officers’ Survey (SLOS) show that the majority of respondent banks continued to report tighter overall credit standards in Q3 2020, although they are fewer compared to Q2 2020, based on the modal approach.