"A positive economic cycle is starting to work in the area we oversee, with gains in corporate earnings driving an improvement in employment and income conditions, which in turn is helping keep consumer spending solid"
- Atsushi Miyanoya, head of the Nagoya branch in central Aichi prefecture
A further sign of broadening economic amelioration in the world's third largest economy is a decision made by the Bank of Japan to raise its assessment of all nine country's regions, after seeing a solid improvement in domestic demand, investment in the housing sector and with signs of improvement in the labour market. This is the first time since April when the bank has raised its outlook of all the regions. During BoJ's quarterly Sakura Report on the regional economies, all nine representatives cited ongoing improvement, with eight using the word "recovery" when assessing the current situation. This means that government measures are starting to spread from urban areas to the regional economies. Meanwhile, Shinzo Abe is planning to launch and head a new government panel to promote deregulation by establishing special economic zones, a part of his growth strategy.
Currently analysts are turning their attention to the BoJ's policy meeting on October 31. And even though policymakers are likely to stay pat on monetary policy, the focus is on the three-year price and growth forecasts that all nine members will update. Furthermore, investors are closely monitoring a gauge of core consumer prices as any radical changes could trigger further changes in policy.
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