Japan raised its overall economic assessment for the first time in 17 months in December, as consumers and companies have turned more optimistic about the outlook due to falling COVID-19 cases at home even amid risks from the omicron variant of the coronavirus.

Authorities raised their views on private consumption and business conditions, with the services sector underpinned by easing coronavirus restrictions, but flagged ongoing risks from supply constraints and raw material prices.

The world's third-largest economy shrank slightly faster than initially reported in the third quarter. But economists expect a rebound in the final quarter of 2021 after pandemic curbs were lifted by the end of September.