The Bank of Japan has left its monthly economic assessment unchanged for August after upgrading it for the first time in a year in July.
The bank says economic activity is virtually flat but improving growth rates overseas will provide the momentum for domestic recovery.
'Private consumption continues to be weak, housing investment remains sluggish, and public investment is declining. Net exports are virtually flat,' the central bank said.
Last month the BoJ upgraded its monthly report on the economy for the first time in a year as fears about SARS faded, share prices rebounded and optimism increased among major companies.
The BoJ said there was a chance of improved growth rates in overseas economies, in particular the US, in the second half of the year, but it was not clear what impact that would have on Japanese fixed investment and employment.
