Investing.com - Japan's economy expanded a surprising 0.4% on quarter, or an annualized 1.7%, in the first quarter as a rebound in consumption and exports offset a drop in business investment.
The rise in the first quarter GDP was the first growth in two quarters following a 0.4% fall on quarter, or an annualized 1.7% drop in the final quarter of 2015 (revised down from -0.3% and -1.1%).
"The U.S. corporate sector is weak. China has excess capacity and other structural issues which are not transparent. We expect some growth but downside risks have been growing since last summer," said a senior Cabinet Office economist.
Consumer spending, which accounts for about 60% of the GDP, rose 0.5% on quarter, the first rise in two quarters.
The GDP data showed employee compensation rose a real 1.3% on quarter on a seasonally adjusted basis in January-March, up from a revised 0.5% gain in October-December.
Still, as noted, the the economy is expected to remain sluggish in the April-June quarter as neither consumption nor capex has shown signs of a quick recovery.
Speaking later, Japan's economy will stay on a "modest recovery" track on improving job offers and incomes, Economic and Fiscal Policy Minister Nobuteru Ishihara said
Wednesday.
The government will push ahead with policy measures to overcome deflation and revive the economy by implementing fiscal programs in the budget earlier than scheduled, Ishihara said.
"We will continue to monitor the economic conditions and respond with flexible policy measures as necessary," he said without elaborating.