Japan's Q1 growth surpasses expectations with 5.9% surge

JAPAN'S economic growth in the first quarter of this year surpassed just about all expectations, surging 5.9 per cent on an annualised basis from the previous three months as consumer spending and corporate capital investment rose strongly ahead of a hike in the national consumption tax on April 1.

The growth surge appeared to mark a victory for "Abenomics", but economists cautioned that growth was likely to take a hit in the second quarter as sales and output fall back from the unusual highs reached in the first three months of the year.

Despite the strong first-quarter performance - real gross domestic product (GDP) expanded at its fastest pace in two years by 1.5 per cent against economists' forecasts of one per cent - Tokyo shares shed 107.55 points to 14,298.21.