TOKYO Feb 27 Japan's government raised its
assessment of the economy in February for the second consecutive
month, saying factory output has bottomed out and corporate
sentiment is improving due to the falling yen and rising share
The government raised its assessment of factory output,
corporate sentiment, corporate earnings and consumer spending as
the economy shows signs of emerging from a mild recession that
began early last year.
The government reiterated that it expects the Bank of Japan
to take bold steps to meet a 2 percent inflation target as part
of a push to escape nagging deflation and to revive the economy.
"The economy has bottomed out, but some weak areas remain,"
the Cabinet Office said in its monthly economic report released
"Some weakness is likely to remain for the time being, but
we expect the economy to recover as sentiment improves due to
improving exports, economic stimulus and the impact of monetary
This marked an upgrade from last month, when the government
said some parts of the economy were showing signs of bottoming
The last time the government upgraded the economic
assessment two months in a row was in January and February 2011,
one month before a record earthquake destroyed much of the
country's northeast coast and triggered a nuclear disaster.
The government said industrial production has bottomed out
and could start to gain some momentum as automakers increase
production for shipments to the United States, a Cabinet Office
That was an improvement from last month when data showed
only tentative signs that factory output would stabilise.
The government turned more positive on corporate earnings
and corporate sentiment to reflect improvements seen in some
government data and in the Reuters tankan, the official said.
Gains in retail sales and a rebound in new car sales also
led the government to raise its view of consumer spending, the
Japan's economy shrank 0.1 percent in October-December. That
marked the third consecutive quarter of contraction but was
slower than a 1.0 percent contraction in July-September,
suggesting the economy is pulling out of recession.
At least two consecutive quarters of contraction is a
commonly accepted definition of a recession.
Prime Minister Shinzo Abe, who led his Liberal Democratic
Party to a landslide election victory in December, has called
for aggressive monetary easing and heavy fiscal spending to beat
persistent deflation, helping to drive down the yen and push up