The government retained on Monday its assessment that Japan's economy is recovering moderately but adopted a weaker view on corporate sentiment due to a firming yen and Britain's vote to leave the European Union.
The Cabinet Office said in its report for the fifth straight month that the economy is experiencing "a moderate recovery, while weakness can be seen recently," as consumer spending continues to lack strength while income and employment conditions improve.
Reflecting the adverse effects of the yen's appreciation, which tends to reduce the profits of exporters, "firms' judgment on current business conditions shows further cautiousness," the office said. In June, the government said business sentiment showed cautiousness.