Japan's government has raised its growth forecast, predicting the economy will expand 2.5% in the coming fiscal year.

This is thanks to a weakening yen and improved global demand for exports.

The Cabinet office said expectations that the weaker yen will boost exports and fatten manufacturers' earnings prompted the revision from the earlier estimated 1.7% growth in fiscal 2013.

Japan's new fiscal year begins on April 1.

The consumer price index is forecast to rise 0.5%, less than the inflation target of 2%. Inflation-adjusted growth for this fiscal year is estimated at 1%.

The revised forecasts assume the yen will average 87.8 yen per US dollar in fiscal 2013, compared with 81.9 yen per dollar for this fiscal year.