TOKYO (Kyodo)--The government on Wednesday upgraded its assessment of the Japanese economy for the second month in a row and deleted the phrase meaning deterioration from its report for the first time in seven months, citing signs of recovery in exports and industrial production.

''While the economy is in a difficult situation, movements toward picking up are seen in some areas,'' the Cabinet Office said in its monthly report for June, in the latest indication that the worst of the recession may be over.

The government had used the expression indicating a downturn to describe the state of the economy since last December.

In May, it said, ''While the economy is in a difficult situation, the pace of deterioration has become moderate,'' raising its overall economic assessment for the first time since February 2006. In the previous three months, it said the ''economy is worsening rapidly while in a severe situation.''

In its June report, the office said the prospects for the economy amid the harsh employment situation are ''likely to remain severe for the time being.''

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