The annualized 2.2 percent growth of Japan's gross domestic product for the October-December period — the first rise in three quarters — may indicate that the negative impact of the consumption tax hike last April is easing. Consumer spending, which accounts for 60 percent of GDP, rose 0.3 percent from the previous three months for the second quarterly increase in a row. Still, the economy's upturn was far weaker than forecast by private-sector economists.

While exports grew 2.7 percent on the back of increased shipments to the United States and China, the pickup in personal consumption remains far from robust as net declines in wages continue with prices rising faster than pay raises. Although prevalent forecast points to the economy maintaining modest growth in the January-March quarter, a full-scale recovery will require a sharper increase in consumer spending.

In that respect, it is questionable whether the current policies taken by the administration of Prime Minister Shinzo Abe and the Bank of Japan match the realities of the nation's economy. After the consumption tax rate hike from 5 percent to 8 percent last April, the economy shrank for two consecutive quarters as consumer spending was battered by higher prices caused by the tax hike and the rising cost of imports due to the falling yen, as well a reactionary fall in demand after people rushed to buy ahead of the tax hike.

Household spending declined on a year-on-year basis for nine months in a row to December, while the consumer price index in 2014 rose 2.6 percent from the previous year — the sharpest increase since 1991.

Price increases have in fact been slowing in recent months, with sharp declines in crude oil prices lowering the cost of gasoline and other petroleum-related products. Consumer spending appears to be underpinned by the deceleration in the rise of prices. But the benefits from falling crude oil prices have been partially offset by the accelerated fall of the yen against the dollar, which followed the BOJ's additional monetary stimulus in October.

In a bid to aid the Abe administration's fight against deflation, the BOJ introduced "unprecedented" monetary easing in 2013 with the target of achieving a 2 percent annual inflation rate — not including the effects of the consumption tax hike — in two years. The chance of achieving that target still appears remote, with the government forecasting 1.4 percent inflation for fiscal 2015. While the yen's steep fall under monetary easing has helped Japan's globally-operating major firms earn record profits, the weak currency appears to have done more harm than good for consumers.

The Abe administration is again urging corporations that are benefiting from the weak yen to translate their profits into higher wages for their employees as the pay increases that workers got last year weren't steep enough to compensate for higher consumer prices. But the central bank's policy should also be reviewed in terms of its effect on household consumption.

To cope with the negative impacts of the consumption tax increase last April, Abe introduced a ¥5.5 trillion stimulus package financed by an extra budget for fiscal 2013, saying that the measure would solidify the path for Japan's economic revival. But the subsequent increase in public-works spending failed to stop the economy from falling into recession, proving that the effectiveness of the government's shot-in-the arm approach to quickly buoy the economy has its limits.

After the prime minister postponed the second phase of the consumption tax hike by 18 months last fall in the face of the slowing economy, the Abe administration launched another stimulus program to the tune of ¥3 trillion. It remains to be seen how much impact the latest spending package will have to aid a full-scale recovery.