The Bank of Japan on Thursday upgraded its economic views on six of the nation's nine regions, helped by strength in domestic demand despite inflation and a revival of inbound tourism.
The Kanto-Koshinetsu area centering on Tokyo is among the six that saw an upgrade. The assessments were retained for the remaining three -- Tokai, where Toyota Motor Corp. is headquartered, the Kinki region that includes Osaka and Kyoto, and Kyushu-Okinawa.
"All nine regions reported that their respective economies, despite being affected by a slowdown in the pace of recovery in overseas economies and by price rises, had been either picking up or recovering moderately," the BOJ said in its quarterly Sakura report.
Private consumption, making up over half of the Japanese economy, has been resilient, even as rising prices of everyday goods weigh on consumer sentiment.
Both the BOJ and economists see the sustainability of wage growth as key for Japan to ensure a virtuous cycle of price and wage hikes. The government is planning to draw up a fresh economic package to ease the pain of inflation felt by households.
While shipments of semiconductors and related machinery have been falling, robust auto exports have given the economy a boost as automakers have been ramping up production now that parts shortages have eased.
The quarterly report is among the materials the BOJ will use when it holds a policy-setting meeting in late October.
