Japan's factory output rises 4.0 percent in April

Japanese factory output rose 4.0 percent in April from the previous month, official figures showed Wednesday, bolstering data indicating the world's third-largest economy is finally seeing moderate expansion.

However, the figure was slightly down on market expectations of a 4.2 percent rise and came a day after data showed consumer demand remains weak despite years of government efforts to boost spending.

The positive reading comes after factory output fell 1.9 percent in March, according to data released by the Ministry of Economy, Trade and Industry.

The ministry also revised upwards its prospects for factory output in May from a 3.7 percent fall to a 2.5 percent fall, and expects output will rise 1.8 percent in June.

The latest data is good news for Prime Minister Shinzo Abe, who swept to power in late 2012 on a pledge to reignite Japan's once-booming economy with a policy blitz comprising massive monetary easing, stimulus spending and structural reforms.

The figures "show that production would be strong in the April-June quarter, underpinning the view the economy is on a recovery path," Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute, told AFP.

Japan's prospects have been improving on the back of strong exports, with investment linked to the Tokyo 2020 Olympics also giving the economy a shot in the arm.

Official figures earlier showed Japan's economy grew 0.5 percent in the first three months of the year -- or a 2.2 percent annualised growth rate.

That was its fifth straight quarterly rise and the longest string of gains since 2006.

The labour market is tight as separate data on Tuesday showed the nation's jobless rate stayed at 2.8 percent in April, the lowest in more than two decades.

Still, private consumption, which accounts for more than a half of Japan's GDP, remains lacklustre as cash-rich firms have been reluctant to hike pay.

The country's household spending shank 1.4 percent year-on-year, extending its declining streak of more than a year, the internal affairs ministry said Tuesday.

Japan has been struggling to defeat years of on-off deflation and slow growth that followed the collapse of an equity and property market bubble in the early 1990s.

Falling prices can discourage spending by consumers, who might postpone purchases until prices drop more or look to save money instead. 

The Bank of Japan has struggled to lift inflation despite years of aggressive monetary easing.

Inflation data released last week showed consumer prices rose for the fourth straight month in April but it was due largely to higher energy bills.

The rise, which came in at 0.3 percent, was still way off the BoJ's 2.0 percent inflation target -- seen as crucial to conquering deflation blamed for holding back the once-booming economy.