BOJ MORE UPBEAT ON JAPAN REGIONS

Central bank will maintain its massive monetary stimulus, says governor

TOKYO to maintain its massive monetary stimulus, with inflation still distant from his ambitious two per cent target.

“Japan’s economy continues to recover moderately as a trend. As for the outlook, it is expected to turn to a moderate expansion,” said Kuroda at a quarterly meeting of the central bank’s regional branch managers yesterday.

In a report issued after the meeting, BoJ maintained its rosy economic assessment for eight of nine regions, compared with three months ago, and revised up the assessment for one area.

Two regions, including the Tokai area home to car giant Toyota Motor Corp, said their economies were “expanding moderately”, the first time in nine years BoJ used such upbeat language for more than one region.

Many manufacturers were benefiting from strong overseas demand for electronic parts and semiconductor-making equipment, the report said, a sign Japan’s economic recovery continues to rely heavily on exports.

Two regions offered a rosier view on private consumption than three months ago, as a tightening job market prompted some companies to raise wages, the report said.

Some firms complained that uncertainty over the new US administration’s trade policies could affect business plans, though few said they already planned to curb domestic spending, said a BoJ official.

“We postponed a plan to boost capacity at our plant in Mexico due to uncertainty over the new US administration’s policies. But we don’t plan to change our investment in Japan,” a maker of metal products in eastern Japan said in the report. Reuters