The Bank of Japan on Thursday raised its assessments for two of the country’s nine regional economies, underscoring a steady economic recovery amid robust exports and an uptick in household spending.
In its quarterly Sakura Report, the central bank upgraded its view of the Shikoku and Kyushu-Okinawa regions but lowered its evaluation of Hokkaido.
The report, named after its cherry blossom-colored cover, is released every three months following a meeting of the BOJ’s regional branch managers.
The BOJ left its evaluations of Tohoku, Hokuriku, Kanto-Koshinetsu, Tokai, Kinki, and Chugoku unchanged.
At the branch managers’ meeting, BOJ Gov. Haruhiko Kuroda said nationwide inflation is likely to pick up toward the central bank’s 2 percent target as economic conditions continue to improve, reaffirming his commitment to keeping monetary easing steps in place until the objective is reached.
“Core consumer prices, minus fresh food, are currently rising at around 1 percent year on year. Looking forward, the pace is expected to gain momentum toward 2 percent as the macro output gap improves and inflation expectations rise,” he said at his first such meeting since beginning his second five-year term this week.
“We will continue ‘quantitative and qualitative easing with yield curve control’ until our 2 percent price stability target can be sustained in a stable manner.”
Upon taking the job in 2013, Kuroda introduced bold stimulus aimed at beating growth-stunting deflation by lowering borrowing costs and lifting the stock market.
The strategy includes massive purchases of government bonds to guide the benchmark long-term interest rate to around zero and a short-term policy rate of minus 0.1 percent. The BOJ also purchases risky assets, such as exchange-traded funds.
While inflation remains low, the measures have helped boost corporate profits and tighten the labor market, leading the economy to eight consecutive quarters of growth through December, the longest run in 28 years.