Japan growth rate revised down but business spending improves

Japan's economy grew slower than initially estimated in the first three months of the year, according to revised figures.

Gross domestic product (GDP) expanded 0.3% in the first quarter, compared to 0.5% in last month's preliminary reading.

The annualised rate of growth was cut to 1% from the initial reading of 2.2%.

The data was weaker than expected and was due to an unexpected decline in oil inventories and private consumption.

Business investment increased though, rising by 0.6% in the quarter compared with the first estimate of 0.2%.

Japan's central bank meets next week and is now expected to keep policy unchanged following the latest data.

However, analysts say the outlook remains positive for the world's third-largest economy and that its recovery is set continue.

"Both retail sales and core household spending recorded strong gains in April, and industrial production finally surpassed the peak reached before 2014's sales tax hike," Marcel Thieliant from Capital Economics said.

"The current [economic] expansion already is the longest in more than a decade," he added.

Prime Minister Shinzo Abe has been pushing Japanese consumers and companies to spend more in the run-up to the Tokyo Olympics in 2020. Private consumption accounts for about 60% of GDP.

Exporters have been helped by a weakening currency, which has made their products more competitive and has boosted the value of profits earned overseas.