The Bank of Japan on Monday maintained its assessments of eight of nine regional economies on the back of improving employment and income conditions as the country’s economy continues to recover moderately.
The central bank upgraded its view on Hokkaido from the previous report in April, saying the region’s economy has been recovering moderately, citing an increase in production.
“We recognize that the economies are on the recovery track without a major regional gap,” a BOJ official said, with the central bank describing all nine regional economies as “recovering” in July, though their pace differed.
Indicating a recovery in housing demand, which had dropped after last year’s consumption tax hike, the BOJ raised its assessment of housing investment in six regional economies, including the Kanto-Koshinetsu region centering on Tokyo.
The central bank’s assessments on consumption were upgraded for Kanto-Koshinetsu and Hokuriku regions.
Many regions reported improvement in employment and income conditions, with the central bank lifting its view on income in the Tokai region, where Toyota Motor Corp. is based.
Also Monday, Gov. Haruhiko Kuroda told a meeting of BOJ branch managers that the bank will monitor developments in financial markets amid the escalating turmoil in Greece, where citizens rejected austerity measures demanded by creditors in a referendum on Sunday.
Kuroda said the Japanese economy is recovering moderately and that trend is likely to continue under the central bank’s large-scale monetary easing policy, according to a summary of his remarks at the quarterly meeting.
Kuroda pledged that the BOJ will continue its ultra-loose monetary policy to achieve its 2 percent inflation target. He added that the central bank will make necessary adjustments by examining risks to economic activity.
On the price front, the year-on-year increase in the BOJ’s key consumer prices gauge remains around zero and is expected to stay around that level for the time being due to falling energy prices, he said.
The BOJ official who briefed reporters said the branch managers exchanged views on the Greek issue and the Chinese economy, which has been slowing recently, but declined to unveil details of their discussions.