The Japanese government on Wednesday stuck to its view that the economy was recovering moderately, but flagged U.S. trade policies as key factors to watch as President Donald Trump's proposals on tariffs cast uncertainty over the economic outlook.

The U.S. president's threat to impose a 25% levy on car imports would likely deliver a big blow to Japan’s economy.

Japan’s exports rose at a faster clip in January as businesses ramped up orders just as US President Donald Trump unleashed a barrage of protectionist policies expected to take effect in coming months.