BoJ upgrades assessment on three regions, all picking or recovering moderately

In the Regional Economic Report released today, BoJ painted an encouraging picture of economic recovery. Despite challenges like past spike in commodity prices. All nine regions “had been either picking up or recovering moderately”.

Moreover, three regions – Tokai, Chugoku, and Kyushu-Okinawa – have received upgrades in their economic outlooks, while the views on Hokkaido, Tohok, Hokuriku, Kanto-Koshinetsu, Kinki, and Shikoku remain unchanged.

The report also revealed that numerous regions have seen wage increases across small and mid-sized firms broadening to an extent not witnessed in recent years. However, the future of these wage hikes remains uncertain.

Takeshi Nakajima, BoJ’s branch manager overseeing Kansai western Japan region, underscored this ambiguity, stating that it’s premature to predict if companies will continue raising wages next year. “A lot of companies in the region say that will depend on this year’s earnings and what their rivals could do,” Nakajima said during a news conference.

He added, “If companies can earn enough revenues to pay for higher wages, there’s hope wage rises will continue. Given uncertainty over the outlook, however, it’s premature to say decisively that this will happen.”