TOKYO—Japan is quickly recovering from the impact of the March 11 earthquake and tsunami, a Bank of Japan report on regional economies showed Monday.
Seven of Japan's nine regions, including the northeast area directly hit by the disaster, upgraded their assessments in the July edition of the quarterly Regional Economic Report from the April edition.
"Seven regions—which had made a cautious assessment in the aftermath of the Great East Japan Earthquake—reported that there were signs of a pick-up in their economies," said the report, also known as the Sakura Report, citing an easing of supply-side constraints and improved household and business sentiment. The two other regions held their views unchanged from the April report.
Monday's results underscore the view held by many economists that Japan's economy will make a V-shaped recovery, and were consistent with the outcome of the BOJ's tankan survey, released Friday, which showed that business sentiment for large manufacturers is expected to recover by September.
"Looking ahead, Japan's economy is expected to return to a moderate growth path as supply-side constraints ease further and production recovers momentum," BOJ Gov. Masaaki Shirakawa said at the opening of the bank's local branch managers' meeting.
Although the report cited differences in the pace of recovery among regions, many areas show positive signs in key measures such as consumer spending and industrial production. An economic recovery is also seen even in the Tohoku region, which includes the northeastern areas hardest-hit by the quake and tsunami.
"Although the economy deteriorated substantially due to the disaster, moves toward the normalization of economic activity are proceeding steadily," the report said of the Tohoku region. It did add, though, that many businesses in coastal areas remain shut or have been forced to scale back production due to damage from the tsunami.
Uncertainties do remain over the broader Japanese economy, including the fate of nuclear power plants in the country. The head of the BOJ's branch in the western city of Osaka raised concerns over the power supply following a request by the local utility to limit electricity use.
"The call by Kansai Electric Power Co. to voluntarily restrict power use by 15% is adding uncertainty to the economy," Hideo Hayakawa told a news conference. He added that if the operation of nuclear power plants in the region is suspended, it would have a huge impact on the economy as well as people's lives, since the region heavily depends on nuclear power.
Economists are now focusing on whether there will be sufficient demand, particularly from overseas, for Japanese products now that businesses are poised to ramp up production to make up for disruptions over the last few months.
BOJ chief Mr. Shirakawa told the branch managers that while the global economy continues to recover, its pace is slowing, and that international financial markets remain unstable due to concerns about Greek sovereign debt problems.
The quarterly report was released at the meeting of managers from the central bank's 32 domestic branches and general managers based in the U.S. and Europe.
Source: http://online.wsj.com
Seven of Japan's nine regions, including the northeast area directly hit by the disaster, upgraded their assessments in the July edition of the quarterly Regional Economic Report from the April edition.
"Seven regions—which had made a cautious assessment in the aftermath of the Great East Japan Earthquake—reported that there were signs of a pick-up in their economies," said the report, also known as the Sakura Report, citing an easing of supply-side constraints and improved household and business sentiment. The two other regions held their views unchanged from the April report.
Monday's results underscore the view held by many economists that Japan's economy will make a V-shaped recovery, and were consistent with the outcome of the BOJ's tankan survey, released Friday, which showed that business sentiment for large manufacturers is expected to recover by September.
"Looking ahead, Japan's economy is expected to return to a moderate growth path as supply-side constraints ease further and production recovers momentum," BOJ Gov. Masaaki Shirakawa said at the opening of the bank's local branch managers' meeting.
Although the report cited differences in the pace of recovery among regions, many areas show positive signs in key measures such as consumer spending and industrial production. An economic recovery is also seen even in the Tohoku region, which includes the northeastern areas hardest-hit by the quake and tsunami.
"Although the economy deteriorated substantially due to the disaster, moves toward the normalization of economic activity are proceeding steadily," the report said of the Tohoku region. It did add, though, that many businesses in coastal areas remain shut or have been forced to scale back production due to damage from the tsunami.
Uncertainties do remain over the broader Japanese economy, including the fate of nuclear power plants in the country. The head of the BOJ's branch in the western city of Osaka raised concerns over the power supply following a request by the local utility to limit electricity use.
"The call by Kansai Electric Power Co. to voluntarily restrict power use by 15% is adding uncertainty to the economy," Hideo Hayakawa told a news conference. He added that if the operation of nuclear power plants in the region is suspended, it would have a huge impact on the economy as well as people's lives, since the region heavily depends on nuclear power.
Economists are now focusing on whether there will be sufficient demand, particularly from overseas, for Japanese products now that businesses are poised to ramp up production to make up for disruptions over the last few months.
BOJ chief Mr. Shirakawa told the branch managers that while the global economy continues to recover, its pace is slowing, and that international financial markets remain unstable due to concerns about Greek sovereign debt problems.
The quarterly report was released at the meeting of managers from the central bank's 32 domestic branches and general managers based in the U.S. and Europe.
Source: http://online.wsj.com
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