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TOKYO — Japan's central bank upgraded its assessment of the world's No. 3 economy for the first time in nine months amid an upturn in exports and production. It left interest rates unchanged as expected.
The Bank of Japan's nine-member policy board voted unanimously Tuesday to keep the overnight call rate target at zero to 0.1 percent. The central bank has maintained the interest rate in that range since October.
Citing recovering growth in exports and production, the central bank upgraded its assessment of Japan's economy, which slipped to the world's third largest after China in 2010.
"Japan's economy is gradually emerging from the current deceleration phase," the bank said in a statement. "Japan's exports and production are showing signs of resuming an uptrend."
Its previous assessment had said that the "recovery seems to be pausing."
Exports have been a key driver of Japan's economy — home to major manufacturers like Toyota Motor Corp. and Sony Corp., who have relied on demand from the rest of the world to offset lackluster domestic conditions.
The pace of Japan's export growth started picking up in late last year with exports in December rising 13 percent year-on-year following a nine percent increase in the previous month.
In 2010, Japan's exports jumped 24.4 percent — the first year-on-year growth in three years — to 67.4 trillion yen ($809 billion) on strong demand for Japanese cars and steel products.
Among regions, China was Japan's biggest export market, accounting for nearly 20 percent of all shipments last year. Around 15 percent of Japanese exports went to the United States in 2010.
Apart from exports, the central bank said Japanese business investment was recovering. But it noted Japan's private consumption and the employment situation have remained severe.
The bank vowed to continue supporting the economy through a three-pronged approach of "powerful" monetary easing, financial market stability and "providing support to strengthen the foundations of economic growth."
