Despite the rising value of the yen, most Japanese affiliates overseas expect year-on-year increases in sales during the October-March period thanks to economic recovery in Asia, the Ministry of International Trade and Industry said in a report released Friday. The report is based on a survey conducted as of the end of September of 1,350 Japanese manufacturing companies and their 2,936 affiliates abroad. A total of 939 manufacturers and 1,919 affiliates overseas responded. The diffusion index, calculated by deducting the percentage of those expecting a drop off in sales from those otherwise, stood at 28 for the six-month period, down 4 points from the outlook for the July-December period. Despite the decline, however, the level remains high, the report says. The diffusion index of the parent companies rose from 13.4 to 21.9, thanks to the economic recovery in Japan, MITI officials said. In the July-September quarter, yen-based sales at the Japanese affiliates plunged 11.8 percent due largely to big drops in North America and Europe. While sales at the Japanese affiliates in Asia also slipped 5.3 percent in yen terms, their sales within the region were up 2.3 percent helped by growth in Indonesia, Thailand, the Philippines and Malaysia, the report says.Meanwhile, the Economic Planning Agency revised its assessment of Southeast Asian economies for the better in its January report on overseas economies released Friday. In Indonesia, for instance, the EPA said the economy "appears to have bottomed out." This indicates slight improvement from the report released in October, which said the Indonesian economy was showing "signs of bottoming out." Taiwan was the only economy in the world where the EPA revised its assessment downward, but this was due to a temporary downside factor -- damage from the killer earthquake in September. The EPA noted that economic activity in Taiwan was basically firm. As for other parts of the world, European economies are "improving" on the back of strong exports, the EPA said, eliminating the qualifier "mildly," which appeared in its previous report.