Reuters reports that Japan's government upgraded its assessment of the economy on Wednesday for the first time since May 2019 after a key indicator improved for August.

The index of coincident economic indicators rose a preliminary 1.1 points from the previous month to 79.4 in August, the Cabinet Office said.

Based on the index data, the Cabinet Office said that showed economic activity in the world's third-largest economy had stopped contracting, an upgrade from its previous view that the economy was "worsening" in July.

"There is a possibility that the index will grow further this year as there is room for exports, notably auto shipments, and consumer spending to recover," said Koya Miyamae, senior economist at SMBC Nikko Securities.

"The economy overall has been picking up after hitting the bottom around May and a gradual recovery is expected to continue."