Some analysts are revising upward their expectations for Japan's economy and predicting stronger growth, although no one is forecasting vigorous recovery just yet.
The less pessimistic forecasts follow a recent rebound in Tokyo share prices, which reflect investors' optimism about corporate recovery and help the books of debt-saddled banks.
"While Japan is still weak, the pace of atrophy has slowed substantially," said Stephen Jen, chief currency economist at Morgan Stanley in London. "The market had been too bearish on the Japanese economy. If the U.S. economy does recover, so will Japan."
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