Japan's economy "picking up": Cabinet Office

TOKYO, Dec. 22 (Xinhua) -- Japan's Cabinet Office said in a monthly report on Tuesday that the economy is "picking up," marking the fifth consecutive month the government has maintained this assessment.

The Cabinet's report did however highlight "weak movements" in capital spending by Japanese corporations and downgraded its assessment of corporate capital investment, which is responsible for as much as 15 percent of Japan's GDP, for the first time in six months.

Businesses cut spending on plant and equipment at a record pace last quarter, a Ministry of Finance survey showed in December.

The world's second-largest economy is recovering even though it is "short of autonomous factors" and conditions such as the high unemployment rate are "difficult," the government's monthly report said, adding that and while business sentiment is improving, small and midsize firms remain "cautious" about the outlook.

According to the Cabinet, the economy will continue to expand as overseas economies recover and the 7.2 trillion yen (79 billion U.S. dollars) stimulus package is utilized.

The government raised its evaluation of housing construction for the first time in three months while maintaining its assessments of other key economic components such as consumer spending and exports.

Japan remains in a "mild deflationary phase," the report said for a second consecutive month, but the government will work together with the central bank (Bank of Japan) to fight deflation and ensure the economic recovery continues, the report concluded.