Japan's economy grew faster than initially reported in the final quarter of 2016, with an upward revision in business spending and a jump in investment growth bolstering activity.
Asia's second-largest economy grew at an annualized rate of 1.2 percent in the October-December quarter, revised up from a preliminary reading of 1.0 percent growth, according to new data from the Cabinet Office.
However, the revised figure still undershot market estimates: The median estimate in a Reuters poll of economists had pegged growth at 1.6 percent.
On a quarter-on-quarter basis, gross domestic product (GDP) rose 0.3 percent, versus a preliminary reading of 0.2 percent growth and the median estimate of a 0.4 percent increase.
The latest round of modest data confirms the challenges facing Japanese policymakers, who have been working to support growth and boost inflation after years of economic stagnation.
Japan's economy has grown for four consecutive quarters, a feat not seen in three years, but experts say business investment and private consumption remain soft.
"I think markets were looking for a bit more of a broad based lift," Vishnu Varathan, Senior Economist at Mizuho Bank told Squawk Box.
"Capex exceeded market expectations, while the other components didn't rise to the occasion, so to speak. Household consumption remains weak, and net exports did contribute but it was not stellar."