The government on Monday lowered its assessment of the economy for the second consecutive month, citing weakening production and exports.
But its report notes strong corporate profits and investment, and says the recovery is expected to remain solid.
"The economy is recovering at a moderate pace, while some weak movements are seen," the Cabinet Office said in its economic report for December.
In the November report, the office said, "The economy continues to recover, while some weak movements have been seen recently."
It is the first successive downward revision since the three monthly downgrades from November 2002 to January 2003.
The office cited inventory adjustments in information technology-related sectors as the main reason for the downward revision.
The report says industrial production is "weakening," mainly due to inventory adjustments of IT-related products, compared with November's view that production was "flat."