A key gauge of current economic conditions rose above the boom-or-bust threshold of 50 percent in August, following a plunge the previous month, the government said Friday.
The index of coincident economic indicators stood at 88.9 percent in the reporting month, having dropped to 30 in July, the Cabinet Office said in a preliminary report.
A reading above 50 percent is considered a sign of economic expansion; a figure below this line is viewed as a sign of contraction.
The government maintained its assessment of the the economy's current state, saying it is recovering.
"The index plunged in July, but it has moved above the 50 percent line in most recent months," an official at the Cabinet Office said.
Aside from the February and July readings, the index has been above the threshold since January.
Looking ahead, the official indicated that the index of coincident economic indicators is likely to stay above this crucial line in September, citing expected strong industrial production and continuing improvements in employment conditions.
"With a forecast 3 percent rise in production and an expected high reading for the job offers-to-seekers ratio for September, we believe the coincident index will not be a low figure," he said.