Japan's government upgraded its assessment of the economy in September for the seventh time this year because of rising capital expenditure, in another sign Prime Minister Shinzo Abe's reflationary policies are boosting growth.
The upgrade in the monthly economic report suggests the government sees the economy as strong enough to handle scheduled sales tax increases, although it did moderate its views on consumer spending and exports.
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On deflation, the government's view was unchanged from August, saying Japan is approaching an end to deflation as consumer prices excluding fresh food and energy were firming up.
"The Japanese economy is on the way to recovery at a moderate pace," the government said in its report for September, offering a more optimistic view than last month when it said there were some moves towards a sustained recovery.