Amid curbs to fight spread of COVID-19 BOJ sticks to upbeat view on regional economies
TOKYO (JAPAN) – Despite new measures to contain the spread of the pandemic clouding the economic outlook, the Bank of Japan raised its evaluation for three of the nine regions in the country and said most local economies are picking up.
The top bank, in its quarterly report on regional economies, upgraded its assessment on factory output for all the nine regions for the first time since 2009. This is a sign of robust demand for goods mitigating some of the pain caused by modest service-related spending.
“While conditions are severe due to the impact from the pandemic, many regions are seeing their economies pick up,” the bank said in its report.
The upbeat view will strengthen market hopes that the BOJ will withhold expanding stimulus during next week’s rate review.
Bank of Japan altered its view for three areas from October last year and maintained its review for five regions, including the Tokyo area and the “Kinki” western region, which received state emergency measures.
Overseas demand benefited machinery manufacturers and some retailers saw grocery sales picking up as people tend to mostly remain at home, said the report.
There were complaints from tourism firms about the spike in the number of cancellations after the government stopped a discount campaign aimed at bolstering domestic travel.