BOJ Downgrades Assessments of Seven Regions in Japan; Still Maintains 2% Inflation Target

On April 4, 2024, Japan’s Bank of Japan (BOJ) downgraded its assessments of seven out of nine regions in the country due to weak private consumption and auto production. Despite this, the economy as a whole is still in the process of recovering.

In their quarterly Sakura report, the BOJ highlighted positive indicators such as wage hikes spreading from larger firms to smaller ones. This suggests that the central bank’s 2 percent inflation target is achievable. The report also mentioned changes in corporate price-setting behavior which could further contribute to economic growth.

Despite challenges in some regions such as Tokyo and Tokai where Toyota Motor Corp. is headquartered, other regions like Hokkaido and Shikoku still show promise for economic improvement. The BOJ continues to keep a close eye on these regions and the overall economic situation in the country.