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174660
Mon, 04/11/2011 - 19:33
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https://oananews.org//node/174660
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Quake prompts BOJ to cut 7 of 9 regional economic assessments
TOKYO (Kyodo) - The Bank of Japan on Monday downwardly revised its assessments of seven out of nine regional economies in the country following the March 11 earthquake and tsunami that have crippled manufacturers while causing power supply shortages following the crisis at a nuclear power plant.
BOJ Governor Masaaki Shirakawa expressed concern about the difficulties smaller businesses face in raising operating funds following the disaster, although he stressed the nation's financial system has remained stable.
The central bank released its quarterly assessments after a meeting of its branch managers. ''Cautious views about the economy have become widespread in many regions, mainly reflecting setbacks in production following the Great East Japan Earthquake,'' the report said.
The disaster-hit Tohoku region of northeastern Japan ''reported significant damage to the economy from the earthquake, with impairment of the social infrastructure as well as production and business facilities,'' it added.
Kazuo Fukuda, who heads the BOJ's Sendai Branch in Tohoku, said at a press conference that production capacity in the coastal areas has been ''completely lost'' because of the tsunami. Reconstruction work is only getting under way and will take time before being fully accelerated.
Representatives from the 32 branches gathered for a one-day meeting in Tokyo. The manager from Fukushima Prefecture, where the nuclear crisis has occurred, was quoted by the BOJ as telling the session that radiation leaks from the Fukushima Daiichi plant and fears of food contamination are heavily weighing on the local economy.
The BOJ cut the assessments for Hokkaido, Tohoku, Hokuriku, Kanto-Koshinetsu, which centers on Tokyo, Tokai, Chugoku and Kyushu-Okinawa, while maintaining the appraisal of Kinki, including Osaka. The bank upgraded the evaluation for Shikoku.
The earthquake has disrupted the nationwide supply chains of industrial products as many factories to produce crucial components were damaged in Tohoku.
Among the most seriously affected were automakers. The BOJ's report said that ''as for motor vehicles and parts, most regions reported a substantial reduction in capacity utilization'' due to the supply disruptions.
The BOJ said production in the areas closely linked to auto manufacturing is coming under strong downward pressure, specifying Tokai, in which Toyota Motor Corp. and Suzuki Motor Corp. have their headquarters, as well as Kyushu-Okinawa, where major carmakers have production bases.
All of the seven downgraded regions reported industrial output is suffering from the earthquake.
Shirakawa told the managers' meeting, ''It seems that some companies, especially small- and medium-sized firms, have faced difficulty accumulating operating capital,'' according to a released statement.
The overall financial system in Japan has remained stable even after the disaster, he said, denying there are any serious problems in daily settlements by commercial lenders.
The BOJ has conducted its biggest ever fund-supply operations since the earthquake, providing ample liquidity to money markets. It has also doubled the amount of its asset-purchase funds to 10 trillion yen in order to support fundraising by companies, while planning to launch an emergency 1 trillion yen cheap loan program to support the early phase of reconstruction work.
BOJ Governor Masaaki Shirakawa expressed concern about the difficulties smaller businesses face in raising operating funds following the disaster, although he stressed the nation's financial system has remained stable.
The central bank released its quarterly assessments after a meeting of its branch managers. ''Cautious views about the economy have become widespread in many regions, mainly reflecting setbacks in production following the Great East Japan Earthquake,'' the report said.
The disaster-hit Tohoku region of northeastern Japan ''reported significant damage to the economy from the earthquake, with impairment of the social infrastructure as well as production and business facilities,'' it added.
Kazuo Fukuda, who heads the BOJ's Sendai Branch in Tohoku, said at a press conference that production capacity in the coastal areas has been ''completely lost'' because of the tsunami. Reconstruction work is only getting under way and will take time before being fully accelerated.
Representatives from the 32 branches gathered for a one-day meeting in Tokyo. The manager from Fukushima Prefecture, where the nuclear crisis has occurred, was quoted by the BOJ as telling the session that radiation leaks from the Fukushima Daiichi plant and fears of food contamination are heavily weighing on the local economy.
The BOJ cut the assessments for Hokkaido, Tohoku, Hokuriku, Kanto-Koshinetsu, which centers on Tokyo, Tokai, Chugoku and Kyushu-Okinawa, while maintaining the appraisal of Kinki, including Osaka. The bank upgraded the evaluation for Shikoku.
The earthquake has disrupted the nationwide supply chains of industrial products as many factories to produce crucial components were damaged in Tohoku.
Among the most seriously affected were automakers. The BOJ's report said that ''as for motor vehicles and parts, most regions reported a substantial reduction in capacity utilization'' due to the supply disruptions.
The BOJ said production in the areas closely linked to auto manufacturing is coming under strong downward pressure, specifying Tokai, in which Toyota Motor Corp. and Suzuki Motor Corp. have their headquarters, as well as Kyushu-Okinawa, where major carmakers have production bases.
All of the seven downgraded regions reported industrial output is suffering from the earthquake.
Shirakawa told the managers' meeting, ''It seems that some companies, especially small- and medium-sized firms, have faced difficulty accumulating operating capital,'' according to a released statement.
The overall financial system in Japan has remained stable even after the disaster, he said, denying there are any serious problems in daily settlements by commercial lenders.
The BOJ has conducted its biggest ever fund-supply operations since the earthquake, providing ample liquidity to money markets. It has also doubled the amount of its asset-purchase funds to 10 trillion yen in order to support fundraising by companies, while planning to launch an emergency 1 trillion yen cheap loan program to support the early phase of reconstruction work.
