The Finance Ministry on Tuesday upgraded its overall assessment of the economy for the second straight quarter for the first time since 2004, citing a further rise in manufacturing.
For the July-September quarter, the ministry said that although the economy nationwide "remains in a difficult situation, it showed some signs of picking up, such as an increase in production activity."
But the ministry maintained its pessimistic view of employment conditions in all 11 regions for the second quarter in a row.
The report is based on assessments by the ministry's regional bureaus.
"By making changes in policies, we must allocate resources directly for people's lives," Finance Minister Hirohisa Fujii said at a meeting of bureau chiefs, the first since Prime Minister Yukio Hatoyama's Cabinet took office Sept. 16.
In the latest report, the ministry raised its outlook for the regions of Hokkaido, Tohoku, Tokai, Shikoku, Kyushu, Fukuoka and Okinawa thanks to rising output in the automobile and electronics sectors.
It said stimulus measures at home and abroad have helped increase demand for cars and consumer electronics.
The ministry said economic conditions have improved from the previous quarter in 28 of the 47 prefectures. That is the third-highest number since comparable data became available in 2004, according to a ministry official.
The ministry upgraded its assessment of personal spending for three regions — Hokkaido, Tohoku and Okinawa — and kept them unchanged elsewhere.
The Bank of Japan said Oct. 19 the economy is improving in the nine areas it tracks for its economic assessment, also raising its evaluation.