On the back of solid demand, including housing investment, and with signs of improvement in jobs and income, the Bank of Japan on Monday upgraded its assessment of the nation's nine regional economies from three months ago.
In its quarterly Sakura Report on the regional economies, all nine noted improvement, with eight using the word "recovery" in their assessments. The report was released after the central bank's branch manager meeting.
The report hints that the recovery has started to spread from urban areas to the regional economies, led mainly by firm domestic demand, such as consumer spending, and increased housing and public investment.
BOJ Gov. Haruhiko Kuroda said earlier Monday that the economy is "recovering moderately." This is expected to continue, backed by a virtuous cycle of production, income and spending, Kuroda added.
Eight regions, such as the Kanto-Koshinetsu area including Tokyo, and the Kinki area, including Osaka, noted they have been recovering or recovering moderately, while the Hokuriku region said things have been picking up steadily.
Monday was the first time since April that all nine regions upgraded their assessments. In its July report, eight of the nine posted upgrades.
On consumer spending, five regions logged upgrades after an increase in spending for value-added products and services was observed, even though spending for commodities remained restrained, a BOJ official said.
Four regions lifted the view on corporate investment, while eight raised the assessment on production, supported partly by a pickup in overseas demand.