The Bank of Japan maintained its assessment Monday on seven of nine regional economies from October, while upgrading the view on the Tokai area in central Japan on the back of an increase in automobile production and solid employment conditions.
The central bank said the economy of the Tokai region — home to Toyota Motor Corp. — has been “expanding at a moderate pace.” It is the first time since April 2008 that the wording “expansion” was used to describe the state of a regional economy, according to a BOJ official.
By contrast, the BOJ cut the view on the economy of the Kinki region centering on Osaka because of flattening production activity amid a slowdown in the Chinese economy.
In addition to the Kinki area, the assessment on production was revised down in the Hokkaido and Tohoku regions, the BOJ said.
All nine regional economies kept intact the view on capital investment and personal spending, with eight regions reporting that the economy had been recovering moderately or had continued to recover.
The results came as Japanese and overseas stocks are sliding considerably and the yen has been firming against the dollar amid concerns about an outlook of the Chinese economy and plunging crude oil prices haunted by oversupply worries.
Japan’s consumer spending has been sluggish, as warm weather has hurt sales of winter clothing, while a growth in real wages remains subdued.
Earlier in the day, BOJ Gov. Haruhiko Kuroda said the bank will make adjustments as necessary by examining upside and downside risks to economic and price activity, while noting its large-scale monetary policy has been exerting its intended effects.
Despite the turbulence in the financial market, the BOJ chief said Japan’s economy is recovering moderately and the improvement is likely to continue, though its exports and production have been affected by the slowing of emerging economies including China.
On the price front, year-on-year increases in consumer prices remain at around zero percent and are likely to stay around the same level for the time being due to declining energy prices, Kuroda said.
The BOJ chief said the central bank will continue its accommodative monetary policy to achieve its 2 percent inflation target, according to a summary of his remarks at the bank’s quarterly meeting with branch managers.
Separately on Monday, the Ministry of Economy, Trade and Industry said Japan’s industrial output fell a seasonally adjusted 0.9 percent in November from the previous month, revised up from a preliminary 1 percent drop.
The index of output at factories and mines stood at 97.9 against the base of 100 for 2010, compared with 97.8 in the preliminary report, partly because production of aircraft parts is included in the latest data, a ministry official said.
Industrial shipments were also revised up to a 2.4 percent drop from the previous 2.5 percent fall, while inventories were unchanged at a 0.4 percent increase.