A monthly report to be issued Wednesday will express greater optimism about the economic recovery, with the government upgrading its assessment for the first time in six months, sources said Tuesday.

The Cabinet Office will say, "The economy is recovering" in its report for February, dropping the phrase "at a moderate pace" from the January report to better reflect rising production and exports, and an improving employment picture, the sources said.

Economic and fiscal policy minister Kaoru Yosano signaled an upgrade in the February report, telling reporters, "It is true that all kinds of indicators look upward."