- Moderate recovery in many regional economies – BOJ report
- BOJ upgrades opinion for 1 of 9 regions, maintains rating for 8
- Some firms are considering wage increases, others are cautious – BOJ
TOKYO, Oct 6 (Reuters) – Most of Japan’s regional economies are recovering moderately, with some companies considering wage increases, the central bank said in a quarterly report, underlining its hope household incomes will grow enough to offset rising living costs .
In the report released on Thursday, the Bank of Japan (BOJ) raised its assessment for one of the country’s nine regions and left its assessment unchanged for the remaining eight.
“In many regions, the economy recovered modestly as supply shortages eased,” the BOJ said, adding that businesses saw a recovery in consumption as COVID-19 infection cases fell.
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“Companies experiencing strong profits or facing labor shortages have increased summer bonuses or are considering raising wages next spring,” the BOJ said. “On the other hand, some companies said they are cautious about raising wages due to the difficult business environment such as rising raw material costs.”
The BOJ remains an outlier in a global wave of central banks tightening monetary policy to combat rising inflation.
While consumer inflation surpassed its 2% target, BOJ Governor Haruhiko Kuroda stressed that recent costly inflation needs to be accompanied by higher wage growth for the central bank to consider changing its ultra-loose policy.
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Reporting by Leika Kihara; Edited by Tom Hogue and Lincoln Feast.
Our standards: The Thomson Reuters Trust Principles.
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