Bank of Japan boosts stimulus.
GDP growth forecast for next year raised to 8.4% from 8.1% as impact of easier credit and infrastructure spending kicks in.
Government now expects 5.7%-5.9% growth in 2012-13 but on track to hit 5.3% deficit target.
Ex-prime minister Shinzo Abe said considering $120 billion stimulus to kick start economy in his second term.
Weak global demand amid Europe's debt problems and a slow U.S. recovery overhang China's economic rebound.
Factory output and retail sales hit eight-month high in November but inflation ticks up.
Sees 6% growth in region this year, 0.1 percentage point less than forecast in October.
Global trade will grow faster than the global economy next year, and continue to do so in the years ahead, with India, China and Vietnam in the vanguard.
Benchmark rate cut to three-year low at 3% as end to resources investment boom looms.
November's rise in the official Purchasing Managers' Index and higher refinery throughput provide new evidence of manufacturing recovery.
