Japan's gross domestic product for the January-March period increased 1.5 percent from the previous quarter or an annualized 5.9 percent — a pace of growth that exceeded the forecasts of private-sector economists. It was mainly driven by last-minute purchases by consumers ahead of the consumption tax hike from April 1 and robust capital investments by businesses.

After six straight quarters of growth, the nation's GDP is expected to suffer a reactionary contraction in the April-June period, but the government says that the decline will be within the range of expectations and that the economy will enter a virtuous circle after recovering in the July-September period. Rather than be too optimistic, however, the government should be cautious about latent risks that may negatively impact the economy for years to come.

Consumer spending, which accounts for about 60 percent of Japan's GDP, increased 2.1 percent in the January-March period thanks to strong demand for high-priced durable consumer goods, such as electronics, personal computers and cars. Sales of consumer durables as a whole grew 13.7 percent — faster than the 4.5 percent rise registered in the January-March period of 1997 just before the previous consumption tax hike. But the strong sales of those products are more a reflection of one-off consumer sentiments to buy before the tax hike than improvement in disposable income of households.