Japan's economy expanded much faster than initially expected in the second quarter, adding to growing signs a solid recovery is taking hold and heightening the case for Prime Minister Shinzo Abe to proceed with a planned sales tax hike next year.
A marked improvement in capital expenditure led to an upward revision in April-June gross domestic product (GDP) to an annualised 3.8 percent expansion from a preliminary 2.6 percent increase, data released by the Cabinet Office showed on Monday.
The expansion, which roughly matched a median market forecast for a 3.7 percent increase, underscores the strength of Japan's recovery and boosts the chance the government will proceed with a two-staged increase in the sales tax.
(Read more: Is Japan's economic recovery gaining traction?)
It was the third straight quarter of increase following a 4.1 percent growth in January-March.
On a quarter-to-quarter basis, GDP growth was revised up to a 0.9 percent increase from a preliminary 0.6 percent.