* Output to keep rising on pickup in overseas economies-BOJ
* BOJ upgrades view on private consumption
* Adds reversal of yen rises to ease pain for exports
By Leika Kihara
TOKYO, March 14 (Reuters) - The Bank of Japan on Wednesday said it expected output to keep rising in the next quarter and lifted its assessment on consumer spending, signs that it is becoming increasingly confident the economy will achieve a moderate recovery from spring.
The upbeat tone suggests the central bank feels little need to offer immediate, additional monetary stimulus, although its actions have become less predictable after it eased last month despite signs of improvement in the economy.
A recovery in overseas growth, post-quake reconstruction spending and increased production by automakers to make up for shortfalls caused by last year’s Thai floods will also boost factory output in April-June, the BOJ said in its economic report for March.
“There are signs output and public investment are picking up,” the central bank said in the report. That compared with the previous month’s report which said output was flat and public investment was bottoming out.
The BOJ also said downward pressure on exports would likely ease if recent reversals in yen rises were sustained, adding that brighter signs from the U.S. economy were also good for exports.
“Exports will gradually emerge from flat growth and increase moderately as overseas growth picks up,” the report said.
The central bank was more upbeat on consumer spending than last month, saying it is gaining momentum, helped by government tax breaks for low-emission vehicles that have spurred car demand. Last month it said consumption was firm.
As widely expected, the BOJ refrained on Tuesday from easing monetary policy via an increase in asset purchases and instead expanded a loan scheme to encourage banks to fund prospective growth industries.
The decision, which disappointed some market players who had hoped for another “big bang” stimulus after last month’s easing, likely reflected the BOJ’s view that the economy did not need additional support now given recent positive signs.
In a statement issued after Tuesday’s policy meeting, the BOJ said Japan’s economic activity was more or less flat but showed signs of picking up. Its tone was slightly more upbeat than last month, when it said only that economic activity was more or less flat.
Analysts, however, expect the BOJ to ease again as early as next month, pointing to its increased determination to beat deflation after having set a 1 percent price goal in February.
The BOJ issues its view on the economy in a statement published shortly after its policy decision, and offers a more detailed assessment in a monthly report released the following day.