BOJ maintains assessment for all 9 Japanese regions in latest Sakura report

The Bank of Japan’s latest quarterly Sakura report left its assessment unchanged for all nine Japanese regions, with the overall view still that regional economies are “recovering moderately.” The report highlighted growing concerns about a possible sharp decline in exports and noted that companies are considering price increases for food and daily necessities later in the summer. Those higher prices are being driven in part by elevated raw material costs linked to the Middle East conflict. At the same time, many regions said firms, including smaller companies, are still delivering strong wage increases this year, though some businesses warned it may become harder to sustain such pay rises amid recent economic developments. The report suggests a mixed backdrop for Japan: resilient domestic wage growth and steady recovery, but increasing external and cost pressures that could affect exports, inflation, and the BOJ’s policy outlook.