Reuters

Japan`s economy emerged from recession and grew faster than expected in the first quarter as a post-COVID consumption rebound offset global headwinds, shoring up hopes for a sustained recovery.

But mounting signs of a slowdown in US, European and Chinese growth cloud the outlook for the export-reliant economy, heightening uncertainty on how soon the central bank can phase out its massive stimulus programme.

"Consumption will continue to underpin growth as removal of COVID curbs boost tourism and service spending," said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.

"But the economic recovery will be moderate as weak overseas demand will weigh on exports. It will be a tug-of-war between robust domestic demand and sluggish exports," he said.

The world`s third-largest economy grew an annualised 1.6% in January-March, government data showed on Wednesday, far exceeding market forecasts for a 0.7% gain and marking the first rise in three quarters.

The growth followed a 0.1% fall in the final quarter of last year, which was revised down from a 0.1% rise. The decline marked two straight quarters of contraction, meeting the definition of a technical recession.