BOJ: Tohoku economy back to pre-quake levels except in worst-hit areas

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The economy of the quake-battered Tohoku region has shown steady improvement for five consecutive months, the Bank of Japan's Sendai Branch said in its latest monthly assessment.

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BOJ: Tohoku economy back to pre-quake levels except in worst-hit areas
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The economy of the quake-battered Tohoku region has shown steady improvement for five consecutive months, the Bank of Japan's Sendai Branch said in its latest monthly assessment.

Its report for September, released Oct. 11, says the economy "has been recovering on the whole," which is a step up from August when it said the economy was "bottoming out."

It is the first time the branch has used the term "recovering" since February 2008, seven months before the collapse of Lehman Brothers Holdings Inc.

The BOJ's Sendai Branch determined that the Tohoku region, excluding areas turned into wasteland by tsunami triggered by Great East Japan Earthquake, had seen economic activity recover to levels before the March 11 disaster.

It cited demand related to rebuilding efforts following the completion of initial restoration activities. It also said that economic activities have resumed in some of the worst-hit areas.

Kazuo Fukuda, head of the BOJ's Sendai Branch, noted at a news conference that production levels in the Tohoku region "rely heavily on overseas economies."

Fukuda cited significant downside risks in the U.S. and European economies as the main source of concern.

"Improvement in employment holds the key to a self-sustaining recovery in Tohoku's economy," he added.

According to the Economy Watchers Survey for September, released Oct. 11 by the Cabinet Office, its nationwide business confidence index dropped 2.0 points from August to 45.3 for the second month in a row.

The index reflects economic assessments by retailers and other service providers.

The decline in business confidence is due in large part to concerns about the surging value of the yen, the impact of recent typhoons and the sweltering summer.

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