BoJ sounds pessimistic about Japan’s consumption in a quarterly report

The Bank of Japan in its quarterly regional economic report, sounded pessimistic over the country’s consumption pattern and spending habits, sparked by the Brexit vote.

Further, the central bank cut assessment for two of Japan's nine regions that signaled looming concern over the continuous rise in yen, since the start of the year and weak spending that could derail a fragile economic recovery.

In addition, the central bank also mentioned that the massive quantitative easing program rolled out has not benefitted Japan’s sticky deflationary pressures, as an increasing number of Japanese firms delayed price hikes following diminishing demand.

"Some companies worry that recent market instability, including recent yen rises and stock price falls, could further dent consumer sentiment," the BoJ said in its quarterly report on the regional economy Thursday.

The central bank has cut its economic assessment for two regions, including the southern Kyushu area hit by a devastating earthquake in April, in the report, issued after the meeting, that covers the past quarter.

Moreover, speculations are crowding financial markets that the BoJ will likely ease at its policy meeting this month as weak consumption, a strong yen and external headwinds weigh on the economy and push inflation further away from its goal.

Finally, Britain’s shocking exit from the European Union supported the already-rising yen, pulling down Tokyo stocks that heightened expectations of a BoJ action soon.