Japan returned to work on Thursday after New Year's holidays, with politicians and corporate managers vowing to overcome challenges and people hoping for a better year.

The government expects the Japanese economy to grow in fiscal 2018 at a faster pace than previously projected, and Prime Minister Shinzo Abe vowed to carry out promised reforms.

"The ordinary Diet session (from January) will be a session to implement labor reforms," Abe told a news conference, referring to his pledge to bring change to the country's working style by curbing chronically long hours and boosting women's participation in the workforce, among other steps.