Japan's disappointing growth figures for the second quarter highlight the absence of a factor crucial to a sustained revival in the world's third largest economy: a turnaround in corporate investment.
"Private investment and inventories are contributing negatively to GDP - this implies that Abenomics has to be refocused towards stimulating business activity by corporates," Junko Nishioka, chief Japan economist, RBS Securities told CNBC on Monday.
The economy grew 0.6 percent quarter on quarter in the April to June period, lower than expectations for 0.9 percent growth. The large miss was driven by an unexpected decline in capital expenditure, which fell 0.1 percent, compared with forecasts for a rise of 0.7 percent, and a reduction in private sector inventories. Inventories subtracted 0.3 percent percentage point to growth.
(Read more: Japan misses growth forecast in the second quarter)
"Businesses are still in the process of reducing their inventories, which means there is still not enough external demand to invest in production," said Harumi Taguchi, principal economist at IHS.
Yet economists say the underlying growth momentum in the economy is still intact, pointing to strong consumer spending helped by the rise in stock prices over the past nine months and an increase in summer bonuses. Private consumption rose 0.8 percent in the second quarter from the previous three months, beating estimates for a 0.5 percent rise.