The Finance Ministry on Wednesday kept its upbeat assessment of the economy for the May-July period, bolstered by strong sales of air conditioners and beverages amid the hot summer.
The economy is following a gradual recovery path, even though the pace differs between regions, the ministry said in a quarterly report.
Compared with the preceding three months, production is gradually increasing, personal consumption remains flat and employment is gradually improving, the report says.
"The economy was firm due to brisk sales of digital home appliances, along with growing sales of air conditioners and beverages at convenience stores, spurred by the hot summer," a ministry official said.
"The employment situation also shows improvement as the economic recovery has broadened."
The ministry upgraded its economic assessment for three straight quarters through the February-April period, saying the recovery is gradually spreading from major cities to rural areas.
Of the ministry's 11 regional bureaus, 10 reported growth, while Hokkaido said a deterioration in the economy is ending, according to the latest report.
Of the 10, the regions of Hokuriku, Tokai and Chugoku, and Kyushu and Okinawa revised upward assessments of their economies.
Car production remains high in the Tokai region, and manufacturing of electronic parts and devices for mobile phones and digital home appliances is firm in the Tohoku region, the report says.