TOKYO - Japan's government kept its economic assessment unchanged in December after revised data showed the economy dodged a technical recession in the last quarter due to gains in capital expenditure.
The government also stood by its assessment that consumer spending is holding steady and that corporate profits are improving due to strengthening domestic demand.
"The economy is in a gradual recovery trend, but there are some pockets of weakness," the Cabinet Office said in its monthly economic report on Monday.
The government maintained its downbeat assessment of exports, saying shipments are weak due to China's economic slowdown and worries about emerging markets.
Industrial output has weakened recently, unchanged from last month, the government said.
Last week, Prime Minister Shinzo Abe's government approved a US$27 billion (S$38 billion) stimulus package that will increase cash handouts to pensioners and the agriculture sector to give consumption a boost.
Japan dodged a technical recession after revised data earlier this month showed the economy expanded an annualised 1.0 per cent in July-September. The initial estimate was that the economy had contracted an annualised 0.8 per cent.
The upward revision was due to gains in capital expenditure, but some economists worry companies could curb business investment next year if China's economy continues to slow.
There are also concerns that consumer spending could lose some momentum next year if companies turn cautious about increasing wages.