TOKYO (Dow Jones)--The Japanese government upgraded its economic assessment for the first time in six months in its monthly report for February, as strength in exports and output added to already-robust private consumption.
"The economy is recovering," the Cabinet Office said in the report it issued Wednesday, using more upbeat language than the previous month, when it said the economy was "recovering at a moderate pace."
It was the first upward revision in the overall economic assessment since August last year, when the government declared the economy had pulled out of a lull.
The upbeat tone underscores the government's increasing confidence over the economy, which is getting well-balanced support from both external and domestic demand.
It may also boost expectations that the Bank of Japan may soon end its ultra-easy monetary policy, in which it floods the money market with excess liquidity to help Japan escape deflation.
"Japan's economic recovery is picking up pace," a Cabinet Office official briefing reporters on the report said. "We've seen consistent signs that the recovery now under way is broadening," he said.
The upgrade comes after data released last week showed Japan's gross domestic product expanded 1.4% on quarter in October-December, marking the fourth straight quarter of increases and much higher than growth of 0.3% in the previous quarter.
In the February report, the government revised up its view on exports and industrial production, saying they are "increasing moderately." This was a slightly more upbeat view than the description in January's report, which said that they were "picking up."
The Cabinet Office's index gauging export volume rose 3.2% on quarter in October-December, much higher than 0.6% growth in July-September, as Japanese automobile and electric machinery sold well in the U.S. and China.
Accelerated export growth was largely behind the strength in industrial output, which rose 2.6% on quarter in October-December after falling 0.2% in the previous quarter, the Cabinet Office said.