The Cabinet Office will upgrade its overall assessment of Japan's economy in its monthly report for August, due out Tuesday, government sources said Friday.
The upgrade comes amid recent stock price rises and U.S. economic improvements.
The government will delete wording that appeared in the previous assessment stating that some segments of the economy are weakening, the sources said. It will indicate there are signs of change in Japan's economic environment, they said.
The government last upgraded its assessment of the economy in its March report.
But the government will retain its basic judgment that the economy is generally flat, making the upward revision modest, the sources said.
Behind the expected revision are signs of hope overseas, including receding uncertainty in the United States following the Iraq war.