Bank of Japan Gov. Haruhiko Kuroda (left), attends a videoconference with the central bank’s branch manager managers on Thursday.
The Bank of Japan (BOJ), Thursday’s economic assessment of five of Japan’s nine regions was downgraded amid the lingering effects of COVID-19 and supply shortages of semiconductors that have impacted manufacturers.
The central bank did not change its view on the four remaining regions in its quarterly Sakura Report. This includes the Tokyo region. It stated that the Japanese economy is still in a “severe” situation despite its recovery trend.
The BOJ stated that some regions experienced a “pause in signs” of a pick up due to the effects on the spread of the novel coronavirus in this summer, and cutbacks in certain sectors.
Tohoku and Tokai, Tokai, Kinki (Chugoku, Kyushu), Okinawa were the five regions that had their assessments reduced. The remaining four regions, Hokkaido and Kanto-Koshinetsu, were not affected.
After a COVID-19 emergency, which had affected 19 of the 47 prefectures of the country, was lifted at September’s end, the assessments were made.
BOJ Gov. Haruhiko Kuroda spoke to a meeting of bank branch managers via videoconferencing.
He also stated that economic activity will recover as the virus’s impact slowly diminishes.
He stated that “if the COVID-19 crise subsides, then the positive mechanism of incomes being consumed will gain momentum and the economy’s growth will continue to grow.”
The BOJ’s September tankan quarterly survey revealed that the diffusion index for current conditions rose for the fifth consecutive quarter for both large manufacturers as well as large non-manufacturers. The survey showed that large manufacturers are more cautious about their business conditions towards the end of the year than companies from a variety of industries, due to concerns about the impact of lower automobile production.