Bank of Japan Fukuoka Branch Reports

On July 24, the Bank of Japan's Fukuoka Branch released its latest regional economic report, providing a comprehensive overview of Kyushu's financial and economic conditions. According to the report, the region's economy is recovering gradually, though sector-specific trends vary.

Consumption Holds Steady Despite Inflation

Personal consumption continues to show resilience amid ongoing inflationary pressures. Retail sales at supermarkets and convenience stores remained firm, while tourism-related spending in the service sector has shown signs of improvement.

Investment Trends: Housing Falters, Public and Capital Investment Remain Solid

Housing investment has softened, with new housing starts in May declining year-on-year. In contrast, capital investment remains strong, and public investment is increasing—driven by expanded spending from municipal governments.

Exports Decline

Export activity weakened in June, with year-on-year sales figures showing a decline.

Industrial Production: Sectoral Performance Remains Flat

Overall industrial production remains flat, with varied performance across key sectors:

- **Transport Machinery**: Automobile production has bottomed out, while shipbuilding is increasing.

- **Electrical Components and Devices**: Output remains at a high level, though some areas show signs of weakness.

- **Production Machinery**: Recovery momentum is slowing.

- **Chemicals**: Sector is showing signs of recovery.

- **Iron and Steel**: Includes areas of weakness.

- **Food Products**: Production is declining.

Employment and Income: Labor Market Shows Recovery

Kyushu's labor market is recovering. The ratio of registered job offers to applicants remains high, and employee compensation—based on April estimates—has increased compared to the previous year. The rise is attributed to an increase in regular employment and higher cash wages.

Inflation and Outlook

The Consumer Price Index (CPI) for June 2025 rose by 3.8% year-on-year, reflecting continued inflationary trends.

Bank of Japan's Commentary

The Fukuoka Branch emphasized the need to closely monitor external factors, including inflation and foreign trade policies, as they may influence the region’s economic trajectory in the coming months.

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Bank of Japan Fukuoka Branch/ 九州・沖縄の金融経済概況 （2025 年７月）