TOKYO (Reuters) - Japan is making steady progress toward beating deflation but private consumption continues to be weak with the effect of a sales tax hike in 2014 remaining, the government's top spokesman said on Wednesday.
"Private consumption remains on a weak note as a whole," Chief Cabinet Secretary Yoshihide Suga told a news conference after data showed Japan's economy expanded at the fastest pace in a year in the January-March quarter due in part to a rebound in household spending.
The gross domestic product data and the strength of consumption hold the key to premier Shinzo Abe's decision on whether to proceed with a scheduled second sales tax hike to 10 percent from 8 percent in April next year.
The previous tax hike to 8 percent from 5 percent in 2014 tipped the economy into recession, prompting Abe to delay the second tax hike by 18 months.