The struggling Japanese economy is continuing to deteriorate, but the decline shows signs of slowing down, the country's central bank said on Friday. The bank of Japan's March report said the economic deterioration was expected to moderate steadily as production stop declining, mainly die to a recovery in exports. It was the first time the bank has upgraded its assessment of the economy for 20 months. "Japan's economy still continues to deteriorate as a whole, although the downward pressure from exports and inventories is gradually abating," the bank said.