The Japanese government downgraded its assessment of the economy for the first time in its monthly report in February, citing signs of weakness in private consumption and production, according to Jinshi. Japan's Cabinet Office said the economy is recovering at a moderate pace, although some parts are showing weakness. The government's latest assessment shows that the economy unexpectedly fell into recession at the end of last year, dragged down by weak domestic demand. In addition, the government has lowered its expectations for production, citing a decline in manufacturing activity and some automakers temporarily halting production and shipments. For the Bank of Japan, the downgrade is an unwelcome development as it weighs the timing of its first interest rate hike since 2007. Bank of Japan Governor Kazuo Ueda said last week that the central bank will continue to analyze data carefully to judge whether the economy will continue to recover gradually.