The Finance Ministry on Wednesday upgraded its quarterly assessment of regional economies for the first time in a year, noting sporadic signs of recovery in production backed by exports of digital gadgets and cars.

“There are signs of a rebound in the regions,” says the ministry’s report summarizing assessments made by its 11 regional bureau chiefs. The previous report said the regional economies were “generally leveling off.”

The latest report says some regions suffered from a cold summer, which hurt personal spending for summer clothes and household appliances such as air conditioners. Employment remained severe in many areas, the report says.

The evaluation was upgraded for five regions. For example, the Kanto region, which includes Tokyo, saw higher output of information technology devices, including mobile telephones installed with digital cameras.

The region’s exports of construction machines to China were also strong, the report says.

In the Tokai region, where Toyota Motor Corp. is based, domestic sales and exports of automobiles remained strong.

In Okinawa, tourism — its main industry — reaped high profits.

Assessments for Kyushu and the Chugoku region were also upgraded.

Many bureau chiefs were cautious, however, over any negative impact from the recent surge in the yen against the dollar on export-oriented industries. The dollar fell by more than 7 yen in September, sliding under 111 yen at the end of the month.

Sentiment improves Business sentiment among small and midsize companies improved in the July-September period from the previous quarter, underscoring recent signs that the economy has bottomed out, according to a government survey released Wednesday.

The diffusion index of business conditions in all industries grew 3.6 points to a seasonally adjusted minus 30.2, rising for the first time in two quarters, the Ministry of Economy, Trade and Industry said.

The 3.6-point rise was the highest since the April-June quarter of 2002, when the index improved 3.4 points, the survey said.

The index has been almost flat since the July-September quarter of 2002.

It is calculated by subtracting the percentage of companies reporting a deterioration in their business from that of companies reporting an improvement.

The index of conditions in the manufacturing industry gained 6.1 points to a seasonally adjusted minus 20.4, marking its first increase in two quarters and seeing improvements in all sectors except the food industry.

The index of conditions in the nonmanufacturing industry rose 2.3 points in the reporting quarter to minus 34.8, up for the first time in two quarters, the survey said.

Looking ahead, small and midsize companies forecast improvements in their business conditions in the October-December quarter, with the index rising to minus 25.2, it said.

A second index is calculated by subtracting the percentage of companies reporting a decrease in funding from that of companies reporting an increase.

The index for all industries gained 3.1 points to minus 24.2 and that for the manufacturing industry improved 4.5 points to minus 19.5. The index for the nonmanufacturing industry climbed 2.4 points to minus 26.2.

The Small and Medium Enterprise Agency, a branch of METI, conducted the survey on 18,832 small and midsize companies Sept. 5, of which 17,343, or 92.1 percent, responded.

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