Eight out of nine regional economies in Japan posted slower growth in the three months to June mainly due to the effect of surging energy and material costs, as well as emerging uncertainty about the outlook for private consumption due to higher gasoline prices, according to a quarterly survey by Bank of Japan branch managers released on Monday.

“According to reports from each of the nine regions in Japan, growth of the economy as a whole continued slowing recently, mainly due to the effects of high energy and material prices, although there were regional differences,” the BoJ said in its quarterly survey.

The nine BoJ branch managers reported that profits have been falling recently due to a deterioration in the terms of trade, business sentiment has remained cautious and the pace of growth of fixed investments has been slowing.

They said a deceleration in the household sector has “become increasingly apparent” although the sector has remained relatively firm supported by rises in income.

Six out of the nine regions reported slowing private consumption while the rest said spending was still firm.

Overall, eight of the nine regions, except the Tohoku region, downgraded their assessments by citing emerging weakness in private consumption.

The Kanto-Koshinetsu region, which includes the Japanese capital city of Tokyo, said the economy is slowing slightly as improvement in the labour market appears to have peaked.

In Tohoku, in the northern part of Japan, the economy appears to have halted its recovery while Hokkaido, which heavily relies on public works projects in which the government is cutting back spending, economic activity continues to be somewhat sluggish.

In the Tokai area, where the main plants of automakers Toyota Motor Corp. and Suzuki Motor Corp. are located, the economy continues to expand, but the pace of growth has become slower recently.

The other five regions are Hokuriku, Kinki, Chugoku, Shikoku and Kyushu-Okinawa.

Kinki is where Japan’s major electronics firms such as Matsushita Electric Industrial Co. and Sharp Corp. have their headquarters, while Kyushu-Okinawa is geographically closer to China and Southeast Asia.

($1 = 107.31 yen)

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