The Japanese government stuck to its assessment that the economy is recovering moderately, although it reiterated the need to pay close attention to potential global economic risks and financial market volatility.

"The economy is expected to continue recovering at a moderate pace with the improving employment and income situation," the Cabinet Office said in its monthly report for October, keeping the assessment unchanged for a third straight month.

The report was released after Sunday's general election in which Japan's ruling bloc led by the Liberal Democratic Party lost its majority, complicating the outlook for interest rates and fiscal policy.