TOKYO Japan's government raised its assessment of business sentiment in April, the first upgrade in four months, after the Bank of Japan's tankan survey showed this month that the corporate mood brightened.
However, the government left unchanged for the fifth month its overall assessment that the economy is recovering gradually though pockets of weakness remain.
Japan's economy has shown signs of life in recent months, with exports and factory output benefiting from a recovery in global demand.
Business confidence among big manufacturers improved for a second straight quarter to hit a one-and-a-half year high, the BOJ tankan released on April 3 showed, a sign the benefits of an export-driven economic recovery were broadening.
"Firms' judgment on current business conditions is improving," the Cabinet Office said in its monthly economic report released on Thursday.
This marked an upgrade from last month, when the Cabinet Office, which helps coordinate economic policy, said business sentiment was improving gradually.
The BOJ is expected to offer a more upbeat view of the economy at its policy review next week than it did a month ago, sources have told Reuters, as robust exports and factory output support recovery in the world's third-largest economy.
The economy is expected to recover gradually as employment and wages continue to improve, but uncertainty in overseas economies and fluctuations in the financial markets warrant attention, the Cabinet Office said in its report.
The Cabinet Office left unchanged its assessment that consumer spending is continuing to recover on the whole, capital expenditure is showing signs of pick up, and that exports are recovering.
(Reporting by Minami Funakoshi; Editing by Simon Cameron-Moore)