The Japanese government raised its monthly economic assessment in July for the first time in three months as consumption rose despite a surge in Covid-19 cases.
In its latest assessment, the Cabinet Office said the economy is growing moderately, indirectly improving its outlook on consumer spending, imports and labor market conditions.
Although the number of Covid-19 infections has increased significantly again, the government continues to refrain from reimposing restrictions on businesses, indicating a change in strategy to ensure normal economic activity.
The country has also reopened its borders to foreign tourists despite the fact that the number of actual visitors is still limited.
Analysts predict the economy will recover in the second quarter following a contraction in the previous quarter.
Consumption was a key factor in the strength of the recovery as fears of a recession rose in Japan's main trading partner.
The government plans to add more stimulus measures to help households cope with rising living costs, including petrol subsidies.
