In its Regional Economic Report, the Bank of Japan upgraded its economic assessments for Tohoku and Shikoku. Meanwhile, AI-related demand is growing more than expected, and companies are expanding their activities based on their medium- to long-term capital investment policies. There are also signs that companies are increasing the frequency of price revisions to pass on higher procurement costs, including those for raw materials.
The Bank of Japan published its Regional Economic Report on 8 October, upgrading its economic assessments for Tohoku and Shikoku from the previous report. Assessments for the remaining 7 regions were unchanged, with the underlying trend of recovery or improvement maintained.
The report said that global AI-related demand was boosting production activity, particularly in manufacturing, with the effects spreading across a wide range of fields, including new data center construction, construction demand and communications infrastructure development. It said AI demand is expected to remain robust for approximately the next 3 years.
Some companies indicated that they may increase the frequency of price revisions to pass on higher procurement costs, driven in part by the situation in the Middle East.