BANK OF JAPAN UPGRADES ASSESSMENT OF REGIONAL ECONOMIES

The Bank of Japan on Thursday upgraded its assessments of eight out of nine regional economies, reinforcing the view that the country's economy is beginning to emerge from its worst-ever contraction brought on by the coronavirus pandemic, Mainichi Shimbun reported. 

The central bank released its quarterly Sakura report amid signs of pickups in exports and production. Of the nine regions, only Shikoku in western Japan saw the assessment maintained from the previous report in July. Although economic conditions remained "severe," many regions reported that their economies "had started to pick up or shown signs of a pickup" as economic activities resumed following suspensions due to the pandemic, the report said. 

The BOJ had cut its views on all nine regions for the first and second quarters of the year when Japan was hit by a jump in coronavirus cases. BOJ Governor Haruhiko Kuroda told the bank's branch managers earlier Thursday that the economy will likely be on a recovery path. But, he also said "the pace will be modest due to the lingering impact of global coronavirus infections." Corporate sentiment has improved as economic activity gradually resumed after the country was put under a state of emergency this spring. 

The BOJ's Tankan survey released earlier this month showed that confidence among big manufacturers recovered in the three months through September from an 11-year low, though it remained deep in the negative column. "We expect a modest rebound in auto-related exports," a transport equipment company told the BOJ, according to the report. The company noted that a recovery in the Chinese market has been stronger than expected.