Japan economic outlook rises for first time in eight months

Tokyo: The Japanese government raised its assessment of the economy for the first time in eight months, saying the recovery is beginning to spur profits, home building and consumer spending.

"The economy has been picking up steadily," though it remains in a "difficult situation" because of high unemployment, the cabinet office said Monday in its report for March. The rebound is still weak, it said.

Reports in the past month have shown that the nation's export-led recovery is starting to benefit consumers, with wages rising for the first time in 20 months in January and households increasing spending for a sixth month. The upgrade comes on the eve of the Bank of Japan's board meeting, where it may expand credit measures amid deflation.

"There are budding signs for a self-sustaining recovery in domestic private demand," Finance Minister Naoto Kan said at a press conference in Tokyo. "Concerns over a double-dip recession are abating."

The benchmark Topix index of stocks has climbed 5 per cent this month on speculation that the economy will keep growing. The gauge advanced 0.3 per cent yesterday.

The cabinet office raised its evaluation of corporate profits, business investment, consumer spending, housing construction and employment. The upgrade of five components is the most since July 2009. The government had said in February that the recovery was "short of autonomous factors".

Earnings are "improving" and capital spending "is starting to level off", the report said. Housing construction and private consumption are "picking up", it said.

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