Tokyo is providing financial help to keep two airlines aloft, while unemployment falls and business confidence is up.
The Japanese government has thrown a lifeline to Asia's two biggest airlines by handing them emergency loans.
Japan Airlines System, also called JAL, and All Nippon Airways, or ANA, have received three quarters of a billion dollars to help them overcome a sharp fall in ticket sales in recent months.
Business was hurt by the U.S.-led war in Iraq and the outbreak of Severe Acute Respiratory Syndrome in China and Hong Kong, even though there were no cases in Japan.
Both airlines also received state help after the September 11 terrorist attacks in the United States two years ago.
Some recent economic figures suggest the Japanese economy is improving, and the latest quarterly Tankan survey confirms it. Business sentiment in Japan hit its highest level in almost three years in September.
Confidence among big manufacturers recovered to +1 in September from -5 in June. It is the first time since the year 2000 that the index is in positive territory. The index, which is closely watched by global economists, represents the percentage of companies reporting favorable business conditions minus those reporting a negative environment.
Japan's unemployment rate has fallen to a two-year low. It eased to 5.1 percent in August from 5.3 percent in July.
Government Spokesman Yasuo Fukuda says that is good news.
While a positive sign, Mr. Fukuda notes Japanese businesses are still suffering after several recessions and the government must encourage further economic growth to help.
Tokyo hopes rising corporate profits and improving export levels will help bring unemployment down further. The jobless rate is still near the record high of 5.5 percent, first touched in August 2002.