The government on Monday raised its basic assessment of the economy for the first time in eight months in a revision that cites an improving business climate linked to the receding impact of the April consumption tax hike.

"The Japanese economy is on a moderate recovery, as improvement can be seen in the corporate sector," the Cabinet Office said in its March report, upgrading its views in three of the 14 categories: industrial output, corporate profits and business sentiment.

As for private spending, it "holds firm as a whole," it said, after previously reporting weak consumer confidence as a downside risk to the economy.