MNI POLICY: Most BOJ Regions Up Econ View From July Reports

Branch managers at a majority of the Bank of Japan's regional offices have upped their economic assessment from three months ago as economic activities resumed cross the country, although they noted overall conditions remain 'severe', according to the central bank's quarterly regional economic report.

The economic assessment was upgraded by eight out of the nine regions, with the remaining branch leaving its assessment.

Many branch managers noted the recovery of private consumption, although still at a depressed level. As for capital investment, branches reported that production fell or remained weak, which were consistent with the results of the BOJ Tankan survey.

On production, many reported that it has stopped falling or is recovering, but all the managers saw continues weak labor and income conditions, reflecting sluggish profits or sales.

Amongst comments reported from industry by the regions, one transport equipment firm said that sales of automobolies at home and abroad are recovering and the company plans to increase production. Another said that the recovery of the sector in China is stronger-than-expected and the company expects exports of cars to recover gradually.

An automobile sales firm said sales of cars recovered to the previous year level and sales were boosted by pent-up demand.

An auto-related firm said that demand for auto parts is recovering but future businesses remains uncertain and the company plan to refrain from implementing capex.

SERVICES

One eating and drinking firm said that weak sales continued and the number of visitors continue to be strongly influenced by the spread of the virus.

One company specializing in accommodation said a full-fledged recovery is unlikely as inbound tourism had fallen sharply and the company is restricting spending and postponing capex.