Reuters reports that the Bank of Japan is expected to offer a brighter view next week on the economy, output and exports than in July to signal that they are starting to recover from the devastating impact of the coronavirus pandemic, sources familiar with its thinking said.

But the BOJ will warn at its rate review that any recovery will be modest and bound with uncertainty, as fears over a renewed spike in infections and fragile global demand weigh on household and corporate spending, the sources said.

"It's clear the economy is bouncing back from a severe downturn in April-June, which was blamed largely on lock-down measures to contain the pandemic," one of the sources said, a view echoed by two other sources.