The Bank of Japan on Monday left its assessment of Japan’s economy unchanged in August but indicated the economy is on a recovery path amid expectations of growth in the United States in the latter half of the year.

“Economic activity remains virtually flat,” the central bank said in its monthly report on recent economic and financial developments, repeating a phrase used in July to describe the bank’s general view of the world’s second-largest economy.

The BOJ said exports and industrial production are expected to remain virtually flat “for the immediate future,” suggesting they will start picking up once the growth rate in the U.S. and other overseas economies accelerates in the half-year period beginning July 1.

The report came after the BOJ’s policy-setting panel on Friday left the bank’s monetary policy unchanged, given financial market stability and signs of improvement in the overall economy.

On Aug. 5, the government upgraded its assessment of the economy for the first time in five months due to signs of improvement in the U.S. economy, Japan’s largest export market, and a recovery in Tokyo stock prices from 20-year lows marked in late April.

According to the August report, capital spending is on a gradual recovery trend, albeit showing some fluctuations, industrial production remains flat and private consumption continues to be weak — all unchanged from the July report.

Net exports are virtually flat, also unchanged, but the August report said some recent U.S. economic indicators show signs of improvement in the U.S. economy.

The BOJ said it is “fairly possible” that the growth rate of the U.S. economy will accelerate in the second half of the year but that “careful examination is still required” to judge to what extent capital spending and employment will increase following these developments.

On the financial front, the report says investors’ view on the outlook for Japan’s economy has been gradually improving, citing the steadiness of Tokyo stock prices in recent trading, with the Nikkei Stock Average moving between 9,000 and 9,500 after tumbling to a 20-year low of 7,607.88 on April 28.

But the report says that given the fragility of the nation’s financial system, financial authorities should continue paying close attention to developments in the stock and bond markets to ensure financial market stability.

On the price front, the central bank said import prices and domestic wholesale prices are declining due to falls in crude oil prices in early spring.

The rate of decline in consumer prices has remained virtually unchanged since April.

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