The government is considering leaving its gloomy assessment of the economy unchanged in a monthly report to be released by the Cabinet Office in mid-January, government officials said.
The corresponding report from December says "the economy is continuing to deteriorate." This wording will be retained in the January report, according to the officials.
They attributed the likely move to flagging production activities.
The report will be released by Heizo Takenaka, economic and fiscal policy minister, at a meeting of Cabinet ministers in charge of economic policies.
The report will be brighter, however, in its description of various aspects of the economy, they said.
The Cabinet Office will revise upward its wording on the state of the export sector for the second straight month, partly because "there are some signs that U.S. users' orders for products related to information technology are bottoming out," a senior Cabinet Office official said.
As a result, the decline in U.S.- and Asia-bound exports of Japanese electronics products is slowing, the officials said.
The Cabinet Office official said the jobless rate is "within the scope of our expectations." The unemployment rate reached a record high 5.5 percent in November.
On the production front, overall excess inventories have begun to decline, while production of cars and semiconductor-manufacturing equipment remains sluggish.
The index gauging production levels at manufacturing and mining industries in November skidded by a sharp 1.8 percent from the previous month.
Combined sales by retailers in November fell below year-before levels for the eighth consecutive month of year-on-year falls, the officials said.