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Bank Of Japan Raises Assessments for 7 Out of 9 Regional Economies
Source: breitbart.com
Source Date: Thursday, April 15, 2010
Country: Japan
Created: Apr 19, 2010

TOKYO, April 15 (AP) - (Kyodo)—(EDS: UPDATING WITH RELEASE OF SAKURA REPORT)
The Bank of Japan on Thursday raised its assessments for seven of the nation's nine regional economies as Japan's export-led economic recovery continues amid strengthening demand in emerging economies and the government's stimulus measures.

In its quarterly Sakura Report on regional economies, the central bank said the economies of Hokkaido, Tohoku, Hokuriku, Kanto-Koshinetsu, Tokai, Kinki and Chugoku have all seen improvements from three months earlier. The BOJ did not upgrade its assessment for the Shikoku and Kyushu-Okinawa regions in southern Japan.

All of the regional economies showed signs of recovery but "differences remained in the pace and extent of improvement," the central bank said in the report.

"Although the momentum for a self-sustaining recovery in domestic private demand remains weak, our country's economy has been picking up thanks to improvements in overseas economies and various stimulus measures," BOJ Governor Masaaki Shirakawa said in remarks at the start of the BOJ's quarterly meeting of branch managers.

"Corporate business sentiment has been improving and the shift is spreading to wider areas," the BOJ chief said, adding that the risk of Japan falling into a double-dip recession has receded "significantly."

The central bank holds a meeting with managers from its 32 branch offices every three months to grasp the state of regional economies in order to steer monetary policy. After the meeting, it releases the Sakura Report, akin to the U.S. Federal Reserve's Beige Book.

The report, with a pink-colored front cover reminiscent of cherry blossoms, said all nine regions saw positive effects from the government's stimulus measures for the purchase of cars and consumer appliances, although the Shikoku and Kyushu-Okinawa regions reported slower improvement in car sales.

Corporate capital investment is generally ceasing to fall, the report said. Some major export-oriented manufacturers are boosting capital spending but domestic demand-related manufacturers, such as those in the food and paper industries, remain reluctant to make such investments to cope with sluggish domestic demand, the report added.

A recovery in capital spending is likely to become clearer as increased exports are expected to boost corporate earnings, the report said. But the pace of recovery may be "moderate" considering major manufacturers' recent attempts to relocate a large part of their production bases outside of Japan to cope with future demand growth overseas, it said.

Production improved in every region compared with three months earlier, but most regions reported severe employment and income conditions.

In the previous Sakura Report released in January, the BOJ upgraded its economic assessments for four of Japan's nine regions and left its evaluations of the remaining five unchanged.
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