The Japanese economy has expanded more than expected in recent months. Fresh figures were released just ahead of a central bank policy meeting, with the Bank of Japan now likely less inclined to provide more stimulus.
Japan's economy posted 0.6-percent growth in the first quarter of the year, fresh data from the world's third-largest economy showed Wednesday.
Analysts argued the relatively upbeat figure was cooling expectations of imminent stimulus from the Bank of Japan after a 3-percent sales tax hike last year had sent consumer spending into a downward spiral.
On the year, Japan's gross domestic product (GDP) surged by 2.4 percent as capital spending and the housing market showed signs of strength, offsetting the negative impact ofslightly dipping exports
Higher wages urgently needed
The January-March GDP growth data were good and buoyed sentiment, Daiwa Securities strategist Takuya Takahashi said in a statement.
But some analysts warned the quarterly pickup, which saw the economy rebounding from a brief recession, could still mean that full-year growth might come in flat.
They reasoned that it remained totally unclear whether wage hikes announced by many big Japanese companies in recent months would actually prompt consumers to buy more.
The Asian country is still fighting an uphill battle against deflationary pressures, with inflation picking up by a tepid 0.2 percent in March for the first time in 10 months. Low inflation has meant that consumers have been putting off buying, hoping that they might get the goods they want even cheaper down the line.
hg/sri (AFP, dpa)