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To minimize computer memory consumption in the finite-difference modeling, one tends to place computational domain boundaries as close to the simulated object as possible. Unfortunately, this leads to inaccurate solution in the case when evanescent electromagnetic field is expected to spread far outside the object, as in simulations of eigenmodes or scattering at a wavelength comparable to or larger than the object itself. Here, we show how, in addition to applying the perfectly matched layers (PMLs), outer free space can be squeezed to avoid cutting the evanescent field tails by the PMLs or computational domain borders. Adding the squeeze-transform layers to the standard PMLs requires no changes to the finite-difference algorithms.