The Japanese economy grew at an annualized rate of just 1.0% in the first quarter, according to Cabinet Office data, after earlier government estimates pointed to 2.2% growth.

“The data is not as bad as the headline figure appears. It supports the BOJ’s upbeat view on the economy,” Takeshi Minami, chief economist at Norinchukin Research Institute, was quoted by Reuters as saying.

“Excluding the revision to inventory, private final demand including capital expenditure was strengthening, suggesting that export-led recovery is broadening gradually,” Minami added. “It’s true private consumption is weak, but it will likely firm up from now on.”

“In all, we judge that the state of economy is better than headline GDP shows, and revise up our second quarter forecast to 2.5 per cent from 1.5 per cent at an annualised rate, with our belief that the continued decline in the level in inventories in the last two quarters will turn to an increase in the second quarter,” said Masamichi Adachi, economist at JPMorgan in Tokyo was quoted by the FT as saying.

But the unexpected news also means that the Bank of Japan will likely hold off on any talk about rolling back stimulus at their meeting on June 15-16, despite economists’ earlier expectations that a move to begin pulling back stimulus was next on the docket.