The economy is recovering in eight of Japan’s nine regions, suggesting that the benefits of the weakened yen and high stock prices are spreading around the nation, a central bank report said Oct. 21.
In its quarterly Regional Economic Report, known as the Sakura Report, the Bank of Japan upgraded its assessment of all nine regional economies. The Hokuriku region was the only one not given the “recover” expression, but the report said its “economy has been picking up steadily.”
It was the first time the BOJ used “recover” for more than seven areas since the current form of statistics started being used in April 2005.
In the previous report released in July, the BOJ did not use “recover” for eight regions. It said “the economy has begun to recover” in the northeastern Tohoku region thanks to demand created from post-quake reconstruction projects.
In the October report, the central bank said “the economy has been recovering” in the Tohoku region.
In addition, the latest report said regional economies “have been recovering moderately” in five areas, including the Kanto-Koshinetsu and the Tokai regions, while Hokkaido and Shikoku islands “have begun to recover moderately.”
Strong exports in the automotive industry fueled by the weakened yen, as well as production increases at large companies in other industries, contributed to the improved assessments for the regional economies, the report said.
The Sakura Report also provides assessments for individual fields, such as production, consumption, employment and income for each region.
One negative mentioned in the report is that employment conditions have not improved in some regions. “The employment and household income situation has remained severe” in the Kyushu-Okinawa region, the report said.
“Employment has yet to improve enough for small and midsized enterprises in the manufacturing industry,” said Yoshihide Ichikawa, manager of the BOJ’s Fukuoka branch office.
But high-end goods are selling well across the country, and consumption at department stores was reported to “show continuing signs of picking up” or “has been firm” in many regions.
The October report said housing investment is “increasing” or “picking up” in all nine regions.
However, there are concerns that the consumption tax hike from 5 percent to 8 percent scheduled for April next year could dampen personal spending and create an obstacle for a full-fledged economic recovery of the entire nation.
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