Clearly Japan's economic conditions give little cause for optimism. A steep rise in the value of the yen against the dollar, stagnation in the U.S. and European economies and the end to subsidies for purchasing eco-friendly cars are negatively affecting the economy.
In an Oct. 15 meeting of Bank of Japan branch managers, BOJ Gov. Masaaski Shirakawa said the Japanese economy's return to sustainable recovery under stable price conditions is likely to happen later than expected. He explained that the recovery trend is weakening as the slowdown in overseas economies and a strong yen are dampening business confidence.
In a report issued the same day, the BOJ revised downward its assessment of business conditions in the Kanto Koshinetsu, Tokai and Chugoku regions. The local economies there heavily rely on car-related industries. The BOJ maintained the same opinion as before on the business conditions of the nation's remaining six regions. This is the first time since April 2009 that the BOJ has revised downward its assessment of any region.