Japan’s economy was “starting to recover moderately” as economic conditions improved abroad, the central bank said on Friday after a two—day policy meeting.

“Exports and production have been increasing mainly against a backdrop of high growth in emerging economies,” the Bank of Japan said in a statement, upgrading its assessment of the nation’s economic health.

Bank Governor Masaaki Shirakawa said he expected international concerns over Europe’s fiscal problems to have a “limited” impact on Japan.

But the bank said it needed to pay attention to how Europe’s problems would affect international finance and the global economy.

Its announcement came a day after the government said Japan’s economy expanded at an annualized rate of 4.9 per cent in the first quarter for the fourth—consecutive quarter of growth, bolstered by strong exports to Asia and a recovery in consumption.

The rate marked an improvement of a 1.2—per—cent expansion in the previous quarter.

“Japan’s economy is starting to recover moderately, induced by improvement in overseas economic conditions,” the Bank of Japan said.

It injected 1 trillion yen (11.1 billion dollars) on Friday into money markets in an emergency move to improve liquidity.

Meanwhile, the bank announced a preliminary framework for new lending measures to commercial banks to reinforce economic growth.

The bank’s policy board also decided to hold its key interest rate unchanged at 0.1 per cent.