BOJ raises economic view for 2 of Japan39;s 9 regions
Wage hikes among younger generation underpinning consumption
Many firms see need to keep hiking wages next year report
Firms in western Japan see excessive yen falls as problematic
Western Japan firms bracing for China slowdown to persist

TOKYO, Oct 7 Reuters The Bank of Japan said broadening wage hikes were underpinning consumption and prodding more firms in regional areas to pass on rising labour costs, signalling the economy was making progress towards meeting the prerequisite for more interest rate hikes.

But the central bank warned that some small and mediumsized firms were struggling to earn enough profits to hike wages, a development that required vigilance.

This year39;s wage increases were helping push up consumption with some firms pointing to the effect of solid spending by the younger generation, which enjoyed fairly big pay hikes, the BOJ said on Monday in a quarterly report on regional economies.

The report will be among factors the BOJ will scrutinise at its next policysetting meeting on Oct. 3031, when the board will also conduct a quarterly review of its growth outlook.

A majority of economists polled by Reuters on Sept. 412 had expected the BOJ to raise rates again by yearend.

In the report, the BOJ revised up its assessment for two of nine regional areas in Japan and left intact the view for the remaining regions to say they were recovering moderately.

The BOJ ended negative interest…