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--BOJ: 3 Out of 9 Regions Cut Econ View From January, Although Recovery Intact
--BOJ: 5 Regions Keep Outlook Unchanged, 1 Ups View
     TOKYO (MNI) - Japan's economy continues to either expand or recover in all
nine regions, indicating that the virtuous cycle from profits to spending
continue working, according to the Bank of Japan's latest quarterly regional
economic report.
     However, the scale of the recovery was revised moderately lower by three of
the nine regions.
     "Compared with the previous assessment in January 2019, with the effects of
the slowdown in overseas economies on exports and production being pointed out,
five regions (Kanto-Koshinetsu, Tokai, Kinki, Chugoku, and Shikoku) left their
assessments unchanged, while three regions (Tohoku, Hokuriku, and
Kyushu-Okinawa) revised down their assessments," the BOJ said in the report
published Monday
     "Meanwhile, the Hokkaido region revised up its assessment, due to the
dissipation of downward pressure stemming from the 2018 Hokkaido Eastern
Earthquake," the BOJ said.
     "The background behind these assessments was that domestic demand had
continued to show firm developments, with a virtuous cycle from income to
spending operating in both the corporate and household sectors," the report
added.
     "Specifically, although exports and production have been affected by the
slowdown in overseas economies recently, business fixed investment has continued
on an increasing trend, with corporate profits staying at a favorable level on
the whole," it continued.
     "Private consumption has been increasing moderately, albeit with
fluctuations, against the background of steady improvement in the employment and
income situation," the BOJ noted.
     The regional economic assessment is consistent with the BOJ's board outline
in March, when they maintained the overall outlook, saying "Japan's economy is
expanding moderately, with a virtuous cycle from income to spending operating,"
adding that the economy "is likely to continue its moderate expansion."
     However, in the wake of weaker data, the BOJ lowered its assessment of
exports and industrial production as well as overseas economies, reflecting a
slowing in China and Europe.
     The key points from the report:
     --"Private consumption has been increasing moderately, albeit with
fluctuations, against the background of steady improvement in the employment and
income situation," the report said.
     --A production machine company said, "Orders of semi-conductor equipment to
China is weakening and exports also fell. If a wait-and-see attitude
strengthened due to the trade friction, orders will fall further and we need to
carefully monitor developments."
     --A nonferrous metal firm said, "Production has fallen 30-40% on year in
the wake of the drop in capital investment in China."
     --A company said, "Orders for construction equipment from China are
increasing in the wake of the China's economic stimulus measures."
     --A automobile firm said, "Exports to China fell but the risk is small that
exports fall further."
     --Some companies have decided to put off the implement of capital
investment.
--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com
--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com
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