Japan's central bank has slightly upgraded its economic assessment for the first time in a year, saying yesterday that exports are no longer falling as global uncertainty gradually fades.

　　But the Bank of Japan maintained a cautious view in the months ahead, acknowledging that prospects for recovery depend on events in the United States and the rest of the world.

　　The BOJ said that uncertainties over the global economy were dwindling because of the containment of SARS outbreak and the end of the Iraq war.

　　It also gave a better view on exports, saying they remain flat. In its previous report, it had said they were weakening.

　　A long slowdown has plagued Japan. Some optimistic signs are emerging such as a rise in Tokyo share prices from a plunge to 20-year lows earlier this year.

　　Fears about a looming financial crisis have also lessened after a public bailout of Resona Bank.

　　Corporate profitability is better after a year or two of cost cuts and strategy switches.

　　Company investments are expected to improve, but consumer spending is flat as people remain cautious about the future.

　　In a separate economic report last week, the Japanese govern-ment maintained its gloomy assessment despite the rally in share prices.

　　The Japan's Cabinet Office noted that stock prices have jumped but stopped short of linking that to an upturn in the real economy.

　　Government officials have repeatedly warned that the economy will not mark strong growth at least for the next year, even if a fragile recovery comes on the back of exports later this year.