The Bank of Japan cut its economic assessment as manufacturing activities stagnate

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The Bank of Japan cut its economic assessment for three regions out of nine nationwide in its regional economic report (Sakura Report) released on January 15. Tokai and Hokuriku regions in the Chubu were included in the downgraded three. 

 Manufacturing activities have stagnated significantly due to the effects of the global economic slowdown caused by US-China trade friction and severe typhoon damages. 

 On the other hand, the bank has analyzed that overall economy is expanding moderately in spite of the slowdown effect from overseas economies and natural disasters. 

 As for the future outlook on domestic demand, the bank also expects it will continue to expand moderately limiting the influence of slowing overseas economies. 

 The bank expects that consumers’ spending will hold up the impact brought by the recent consumption tax hike and its influence will not linger with tail wind of improving employment and income.

However, business people are worried that consumers are becoming more frugal, so they will be watching closely the economic situation after June, when the point redemption program provided by the government to mitigate the impact of the consumption tax hike is expected to end.

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