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Japan government upgrades view of exports; overall assessment unchanged

[TOKYO] Japan's government upgraded its outlook for exports for the first time in a year on Thursday, but left its overall economic assessment of a moderate recovery unchanged as private consumption remained weak.

The government's monthly economic report followed data on Thursday showing that exports in January jumped the most since late 2013. The Bank of Japan also improved its assessment of exports and output on Wednesday.

A much-awaited rebound in exports, which had been a soft spot in the economy despite a weak yen, offers hope to policymakers who think cheaper oil prices will spur firms to spend more on wages and investment.

The Cabinet Office also raised its view of the employment situation in Japan, but said a weak consumer mindset and consumption could remain a drag on the overall economy.

"Attention should be given to the downside risks of the Japanese economy such as weakening consumer sentiment and slowing down of overseas economies," the office said.

Japan's economy rebounded from a recession to grow an annualised 2.2 per cent in the final quarter of last year, giving a much-needed boost to Prime Minister Shinzo Abe's efforts to shake off decades of stagnating growth.

But the expansion was still smaller than expected, suggesting a still-fragile recovery amid uneven global growth.