Consumer confidence in Japan rose to a five-month high in March, while the Bank of Japan lowered its assessment in seven of the country's nine regions.
Friday, a report from Japan's Department of Economic and Social Research Institute showed that the consumer confidence index rose to 28.9 in March from 26.7 in the previous month. The improvement in the index was close to the expected level of 29. Consumer confidence increased for the third consecutive month in March after falling to 26.2 in December.
Last week, Japanese Prime Minister Taro Aso announced a stimulus package worth 15.4 trillion yen or US$150 billion to combat recession. The new package includes measures to create jobs, financial incentives and health care. Aso had already unveiled two packages totaling 10 trillion yen since he took office in September.
Elsewhere on Friday, the BoJ lowered its assessment on seven of the country's nine regions in its latest regional economic report. The central bank's view on Hokkaido, Tohoku, Hokuriku, Kanto-Koshinetsu, Kinki, Shikoku and Kyushu-Okinawa underwent downward revisions. Meanwhile, the central bank maintained its view on Tokai and Chugoku.
The BoJ said economic conditions are becoming increasingly severe in the Hokkaido region and the economy is stagnant. This compares with the central bank's January view that said economic conditions are becoming increasingly severe.
The central bank noted that economic conditions are deteriorating significantly in regions like Hokuriku, Kanto-Koshinetsu and Kyushu-Okinawa, weaker than its January assessment of deteriorating economic conditions.
Private consumption was in a severe situation in the Hokkaido region, the BoJ said. Other regions also saw weakness in private consumption, reporting that it was weakening or weak.
Most regions reported that business fixed investment was declining substantially or declining mainly reflecting the substantial decrease in corporate profits and the significant deterioration in business sentiment, the report said. Compared with the previous assessment of business fixed investment, Hokuriku maintained its previous assessment, whereas the other eight regions revised their assessments downward.
Production was declining substantially or declining further in most regions. Employment was deteriorating or becoming increasingly severe in many regions, mainly since production in the manufacturing sector had declined substantially. Household income was declining or relatively weak, mainly due to the decline in overtime payments.
The regional economic report summarizes information from all regional research divisions, mainly at the BoJ's branches in Japan.
Also on Friday, BoJ Governor Masaaki Shirakawa said weakness in Japan's economy is expected to continue for the time being. He noted that weak household and businesses spending would stretch the recession even if exports and production shows improvement.
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