Ministry of Finance. (Mainichi)

       TOKYO (Kyodo) -- The Japanese government on Wednesday downgraded its overall assessment of regional economies for the first time in 18 months, as a global chip shortage and supply chain disruptions weigh on the auto industry.

       The pace of recovery in regional economies is "moderating" partly due to supply constraints, the Finance Ministry said in a report that is part of its quarterly assessment covering Japan's 11 regions, changing from the previous view in which it said they are "recovering although weakness is seen in some sectors."

       It was the first downward revision since April last year when the Japanese economy was experiencing a serious slump caused by the initial impact of the coronavirus pandemic.

       The October report said car production is "pausing" as the worldwide semiconductor crunch, along with parts shortages caused by factory shutdowns in Southeast Asian nations where virus cases have surged, have been forcing automakers to cut output.

       By region, the ministry downgraded assessments for four regions, while maintaining those for six regions including the Kanto and Kinki areas centering on Tokyo and Osaka.

       The downgraded areas such as the regions of Tokai in central Japan and Chugoku in western Japan are heavily reliant on auto manufacturing.

       Only the southern part of the Kyushu region was upgraded. An official at the ministry told reporters output of electronic components and chip-making equipment has been brisk in that area of southwestern Japan.

       The pace of individual consumption is also picking up "moderately," the report said, adding that spending on accommodation and food services "remains in a severe condition."

       The report, meanwhile, said business at hotels, restaurants and department stores is on the increase recently, following a sharp fall in new COVID-19 cases and subsequent lifting of the government's state of emergency across the country on Oct. 1.

       Employment conditions show some weakness due to the pandemic, although the number of job offerings is solid especially among manufacturers, the ministry said.

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