Even before Japan can stage a convincing growth rebound, fears are already building over a sharp slowdown in the world's third largest economy, with one analyst warning of a possible recession next year.
Economic indicators published on Tuesday including weaker-than-expected industrial production and household spending for June, highlighted the fragility of the recovery.
Industrial output fell 3.3 percent in June from May, against expectations for a decline of 1.8 percent. Household spending for the month fell 2 percent month-on-month, lower than forecasts for a rise of 0.7 percent. Employment data, however, was a bright spot, with the country's jobless rate falling to 3.9 percent, the lowest since October 2008.
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"The economy is improving. However, the big question is if Japan can continue to keep growing beyond April 2014 when consumption tax rate is hiked," said Takuji Okubo, chief economist at Japan Macro.