Japan has revised its economic growth rate for the first quarter of the year upwards, after higher-than-expected capital investment.

Japan said its economy grew by 1% in the three months to March, from an earlier estimate of 0.8%.

The new figure lifted the annualised growth rate to 4%, from 3.3%.

Despite the better-than-forecast latest figures, analysts have warned that continued global uncertainty could dent Japanese growth in the months ahead.

Takehiro Sato, head economist at Morgan Stanley in Tokyo said: "If oil prices remain at this level, I'm pretty concerned about demand sustainability in Asia."

Until now falling US demand has been countered by strong demand from China and Russia.

However, Takeshi Minami, head economist at Norinchukin Research Institute, said: "We can no longer count on consumption and exports that helped to push up growth in the first quarter."

Analysts say Japan could see in a sharp slowdown in growth as inflation picks up worldwide as a result of rising food and energy prices.

(BBC)

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