An official Japanese report says that strong exports are helping to boost the economy and the country's number-two auto maker plans to increase overseas production.
The Japanese government upgraded its monthly economic assessment in July but remains concerned that the economy faces difficulties.
Economy Minister Heizo Takenaka says that the brighter outlook comes from higher exports to other Asian nations. He added that industrial production is on an upswing. It is the fourth time that the government has raised its official view of the economy in five months.
The world's second-largest economy grew at an annual rate of five-point-seven percent in the first three months of this year, indicating that the worst recession in half a century has technically ended. However, the report warns that the country's economy faces uncertainties.
A faltering rebound in the U.S. economy, weak stock markets and the strengthening yen cast doubts over Japan's fragile recovery. The yen climbed to a 10-month high Friday against the dollar. The strong yen makes Japanese exports more expensive for overseas buyers.
In the auto sector, Honda Motor is moving toward greater globalization of its production. Japan's second-largest auto maker will expand production in China, making its mainland plants into a major export base for markets in Asia and Europe. In addition to China, Honda plans to build cars or car parts in Taiwan and open more plants in Southeast Asia.
The expansion is part of Honda's three-year plan to boost global sales by 26 percent.
Japan's struggling computer chipmakers will set up a joint venture to become more competitive worldwide. Eleven of the country's big names, such as Fujitsu, Toshiba and Hitachi, will develop designs for more sophisticated computer chips. The deal comes amid a severe slump in chip prices, which last year forced many Japanese electronics makers to post huge losses.
The project will receive millions of dollars in government funds earmarked for semiconductor research.