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"Japan's economy is gradually recovering," the Cabinet Office
said in its monthly economic report on Wednesday. That was
unchanged from January, when it upgraded the outlook for the
first time in seven months.
The government left unchanged its assessment that consumer
spending is "recovering" as spending on flat-panel TVs, home
electronics, and dining out remains firm.
The economy has grown for eight straight quarters, the longest
continuous expansion since a 12-quarter stretch between
April-June 1986 and January-March 1989 around the height of
Japan's notorious economic bubble.
Steady growth increases the chance that the government will be
able to declare an end to deflation, which would amount to a
declaration of victory for Prime Minister Shinzo Abe's ambitious
campaign to reflate the economy.
In the monthly economic report, the Cabinet Office stuck with
its view that industrial output and capital expenditure are
gradually expanding.
The Cabinet Office also left unchanged its assessment that the
labor market is clearly improving, as labor demand is the
strongest in more than four decades.
However, an improving labor market has been slow to push up the
inflation rate, showing how difficult it is to completely rule
out a return to deflation.
Abe took office in late 2012 with a bold plan to shake off 15
years of deflation and sub-par growth.
In the past few years, Abe's labor reforms, corporate tax breaks
and changes to other regulations have started to bear fruit.
Stock prices are close to their highest in 26 years, corporate
profits are near an all-time high, business investment is rising
and exports are growing.
(Reporting by Stanley White; Editing by Richard Borsuk)
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