TOKYO, Jan 20 (Reuters) - Japan's government downgraded its economic assessment for a fourth straight month, citing weak consumption and sharp declines in exports and production, as the world's second-biggest economy faces a deepening recession.
The government, in its monthly report issued on Tuesday, repeated its warning that the Japanese economy could deteriorate further if the financial crisis deepens and stock and currency markets stay volatile.
"The economy is worsening rapidly," the government said in its report for January, adding "rapidly" to is assessment.
"The characteristic of the latest downturn is that it's been so rapid," said a senior official at the Cabinet Office, which compiles the report.
"The previous downturn was caused by the burst of the IT sector bubble. This time the fall in exports and output is broad-based," the official said.
The collapse in global demand since September has hit Japanese exporters hard, prompting major firms like Toyota Motor Corp and Sony Corp to slash production and jobs.
The government cut its assessment on exports and industrial production, saying that they are falling "very substantially".
"Given that industrial output is very important for the overall economic performance, I would say the economy is deteriorating at an unprecedented pace," the official said.
The government also lowered its assessment on consumption, saying it has been soft recently. In December, it had said consumption was flat overall, though there were some weak spots.
Shoppers are tightening their purse strings as share prices wobble and job conditions deteriorate, with Japanese consumer confidence falling to a record low in December. (Reporting by Hideyuki Sano; Editing by Chris Gallagher)