Official figures show that Japan's economy grew by more than estimated in the third quarter due to stronger than expected capital spending by Japanese companies.
The upward revision to growth in the July-September quarter amplified the impact of a rush by car buyers to use expiring subsidies and smokers who stocked up on cigarettes ahead of a tax hike during the period.
The hottest summer on record also drove sales of items such as air conditioners, helping spur growth in the quarter. Private consumption accounts for around 60% of gross domestic product.
Japan's annualised economic growth in the July-September quarter was revised up to 4.5% from an initial estimate of 3.9%, beating estimates of an upward revision to 4.1%. On a quarterly basis, growth was revised up to 1.1% from 0.9%.
Business investment was revised to a 1.3% quarterly rise from the 0.8% gain initially estimated, adding 0.2 percentage points to quarterly expansion.
But some analysts warn of a possible contraction in the fourth quarter in the absence of such one-off factors, amid increasing signs that Japan's economy is slowing as export growth cools.
Japan's economic fiscal policy minister Banri Kaieda told reporters on Wednesday that he expected growth to be 'substantially lower' in the fourth quarter amid signs that companies are cutting back on investment.
Fears that the recovery is heading for further slowdown deepened yesterday as data showed that Japan's trade with the world rose only slightly and machinery orders, a key corporate spending indicator, fell in October.
