The Bank of Japan said Thursday that Japan’s economy remains on a moderate recovery path, maintaining most of its assessments of local economies amid high expectations that plunging oil prices will reinvigorate sluggish consumption across the country.
The central bank kept steady its evaluations of eight of nine regional economies in its quarterly report, citing the fading impact of the consumption tax increase to 8 percent from 5 percent last April, a pickup in overseas and domestic demand and the continued improvement in employment and salaries.
Hokkaido was the only region which revised its assessment downward due to a decline in public investment. Still, the economy in the region has been recovering moderately, according to the report.
“All regions, including the Hokkaido region, reported that the economy had been recovering or recovering moderately as a trend,” the BOJ said in the report.
The central bank released the latest regional economic assessments at a time when Prime Minister Shinzo Abe seeks to address one of his biggest challenges — the country’s flagging local economies.
His “Abenomics” economic policies provided a big boost to major manufacturers by lowering the value of the yen and sparked a surge in the stock market. But this has plagued smaller firms in local regions by raising imported material costs, which came together with a drop in consumer spending following the consumption tax hike.
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