Japan's economy rebounded in final quarter of 2018

Japan's economic growth for the last three months of 2018 rebounded from a slump the previous quarter, growing at an annual rate of 1.4 percent.

The preliminary data the Cabinet Office released Thursday showed recovery in various categories, including exports, consumer demand, investments and government spending.

Gross domestic product, or the total value of a nation's goods and services, had contracted during the July-September quarter.

The data show growth remains weaker than the pace of the shrinking in July-September, which was at an annual rate of 2.6 percent.

Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities, said risks remain for the economy, such as trade friction with the U.S. in the auto sector, as well as a planned tax raise for this year.

The tariffs President Donald Trump has imposed and has threatened to increase could hurt the Japanese economy both directly and indirectly if they affect Chinese growth.

Japan plans to raise the consumption tax in October from 8 percent to 10 percent, which could crimp consumer spending.

Raising that tax has been a major policy challenge for Prime Minister Shinzo Abe but he has postponed the move twice already. The feared social backlash could be a key factor in what is expected to be a major election year for the ruling party.