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Economic assessment upgraded for a third month

Kyodo

The government upgraded its basic assessment of the economy in March for the third straight month Friday, as higher stock prices and a weaker yen have shored up business sentiment and encouraged firms to boost investment and hire more workers.

The economy “is showing indications of picking up recently, while weakness can be seen in some areas,” the Cabinet Office said in its monthly economic report, making upward revisions to four of the 14 categories — industrial output, capital spending, corporate profits and employment.

It is the first time the government has raised its economic assessment for three months in a row since mid-2009, when the economy was still recovering from the aftermath of the so-called Lehman shock, a Cabinet Office official briefed reporters. Last month, the Cabinet Office revised upward its assessment of the economy, saying it “is bottoming out.”

At a briefing after the report’s release, economic revitalization minister Akira Amari noted that “economic sentiment has improved, which has started to affect the real economy.” The government will flesh out growth strategies by the middle of the year to put the economy on a sustainable recovery path, he said.

The report follows recent data showing corporate capital spending in the quarter through December grew from the previous three months and industrial output has trended up amid hopes of an economic recovery.

On its assessment of output for March, the Cabinet Office also upgraded its report for the third consecutive month, saying production is “showing indications of picking up.”

In addition, corporate profits are “showing signs of improvement, mainly among large firms.”