BOJ maintains view of regional economies on solid domestic demand, tourism

Source: Xinhua| 2019-07-08 17:48:56|Editor: Shi Yinglun
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TOKYO, July 8 (Xinhua) -- The Bank of Japan (BOJ) on Monday maintained its assessments of the country's nine regional economies, stating that they were either "expanding" or "recovering."

The regional economies had been supported by robust domestic demand and solid inbound tourism, according to the central bank's quarterly "Sakura Report."

The report did note, however, that a growing number of firms had indicated that the outlook for overseas economies and the impacts these could have on regional economies here looking ahead had increased in uncertainty.

BOJ Governor Haruhiko Kuroda, while addressing the central bank's regional branch managers during their quarterly meeting, said Japan's economy is expected to expand moderately, although a slowdown in the global economy is taking a toll on exports and domestic production.

He reiterated, however, that both short and long-term interest rates will be kept at ultra low levels for an extended period and that the central bank will make necessary policy adjustments to sustain the economy's momentum towards achieving its 2 percent inflation target.

Economists here, however, have been quick to point out that the central bank's lofty inflation target of 2 percent still remains some way off, and corporate and household consumption could see a significant decline when Japan's twice delayed consumption tax hike to 10 percent comes into effect in October.

Japan's economy plunged into recession when the government raised the tax to 8 percent from 5 percent in 2014.

Along with the planned consumption tax hike, the nation's public debt, the worst in the industrialized world at more than double the size of Japan's economy, is set to worsen as Japan's demographic crisis intensifies.

Amid a rapidly aging and simultaneously shrinking population, social welfare costs continue to balloon, while the workforce becomes further hollowed out and the labor crunch here heightens.