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In a
quarterly review of regional economies, the BOJ raised its
assessment for the Hokkaido northernmost region and left intact
the views for the remaining eight areas.
"All regions saw their economies recover or recover moderately"
reflecting gradual improvements in domestic and external demand,
the BOJ said in the report.
The optimism came despite soft exports and output reflecting
feeble overseas demand, which led some analysts to believe the
world's third-largest economy may have suffered a temporary soft
patch in the April-June quarter.
"Japan's economy will continue to recover moderately," BOJ
Governor Haruhiko Kuroda said in a speech to a quarterly meeting
of the bank's regional branch managers.
While stressing that Japan's banking system remains stable,
Kuroda said the BOJ is carefully watching market developments in
the wake of Greece's referendum that voted against European
bailout terms.
The Greek referendum has heightened the chance of the country's
exit from the euro, adding to uncertainty over the global
outlook and casting doubt on the BOJ's rosy view that exports
will rebound and underpin a steady recovery.
The Kinki western Japan region, home to electronic giants like
Panasonic Corp <6752.T>, saw exports continue to rise but output
of machinery and automobiles weaken as inventory piled up.
The regional report will be among factors the BOJ will
scrutinize when it conducts a quarterly review of its economic
and price forecasts at the next policy meeting on July 14-15.
Many analysts expect the BOJ to hold off on expanding monetary
stimulus at this month's meeting, preferring to wait for more
clues on whether economic growth will accelerate enough to nudge
inflation closer to its 2 percent target.
The central bank has stood pat on monetary policy since
expanding stimulus in October last year to prevent slumping oil
prices, and a subsequent slowdown in inflation, from delaying a
sustained end to nearly two decades of deflation.
(Reporting by Leika Kihara; Editing by Chris Gallagher & Shri
Navaratnam)
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