Japan's government stuck to its assessment that the economy is slowly recovering on Thursday but raised its view on exports, saying overseas shipments are showing signs of stabilising on a moderate pickup in the United States and some return in Asian demand. It said in a monthly report that the pace of decline in consumer prices has eased but Japan remains in mild deflation, a slight change from the previous report when it just said the economy was in mild deflation.

"The economy is still picking up slowly, while difficulties continue to prevail due to the earthquake," the Cabinet Office said in the report for April, the sixth straight month it has used the same expression.

The government's view is similar to that of the Bank of Japan, which said on Tuesday the economy is showing signs of picking up, while its Governor Masaaki Shirakawa offered an upbeat view on the outlook.

The government said the nation's exports are "levelling off", upgrading its view for the first time since August. It previously said exports were weakening.

Japan posted its first trade surplus in five months in February after shipments to the United States rose at their fastest annual pace in more than a year.