BoJ cuts assessment for 2 regions
TOKYO: The Bank of Japan (BoJ) cut its economic assessment for two of the country’s nine regions hit by natural disasters, and pointed to complaints by some firms over the potential fallout from escalating global trade frictions.
Several companies surveyed by the BoJ said they were worried that higher United States tariffs imposed on China could trigger an inflow of cheap Chinese goods to Japan, disrupt supply chains or hurt their profits, a quarterly report showed yesterday.
“Some companies said they saw changes in Chinese demand,” said a BoJ official. “Rather than the current impact, many firms voiced worries about the effect the trade tensions could have on their future businesses.”
The US and China have slapped tit-for-tat tariffs on hundreds of billions of dollars of each other’s goods over the past few months, drawing warnings from global policymakers over the potential hit to global growth.
Data earlier yesterday showed Japan’s exports fell last month for the first time since 2016 as shipments to the US and China declined, likely impeding third quarter economic growth and adding to concerns about the broadening impact of the escalating Sino-US trade row.
In a quarterly report on regional economies, the BoJ cut its economic assessment on the quakehit northernmost prefecture of Hokkaido and the Chugoku western region, which saw factory output disrupted by heavy rain in July.
It maintained its assessment for the remaining seven regions, adding that all regions — including those which had their assess- ment cut — saw their economies expand or recover.
It was the first time in just over two years the BoJ cut its assessment for two or more regions.
While the downgrades were due mostly to the damage from natural disasters, the BoJ’s report said some firms fretted about the uncertain outlook stemming from the trade frictions .