Summary Prices had been on the rise, largely due to Japan's heavy post-Fukushima energy bills.
TOKYO (AFP) - Japan s economy limped out of recession in the last quarter of 2014, official data showed Monday, but annual growth was flat and the weaker-than-expected figures were likely to boost calls for more central bank stimulus.
The 0.6 percent expansion in the world s number three economy between October and December follows two consecutive quarters of contraction that came as an April sales tax rise hammered consumer spending. Economists had expected 0.9 percent growth.
However, over the full year the preliminary data showed zero growth, compared with 1.6 percent expansion in 2013. Revised figures will be released in the following weeks.
By contrast, the US economy grew at its fastest pace in four years in 2014, expanding 2.4 percent.
"While Japan s economy has finally left the tax-related weakness behind, the increase in (fourth-quarter gross domestic product) fell short of expectations and supports our view that the Bank of Japan will announce more stimulus in April," said Marcel Thieliant from Capital Economics.
"Today s result indicates that the Bank of Japan s view on growth is too optimistic, and we still believe that the Bank will announce more easing at the late-April meeting."
Last month, Japan s central bank slashed its inflation outlook as plunging oil prices dent efforts to end years of deflation.
But the bank -- which holds its next policy meeting this week -- held off expanding its massive monetary easing programme and boosted its growth forecasts, saying the economy would expand 2.1 percent in the year to March 2016, up from an earlier 1.5 percent forecast.
Prices had been on the rise, largely due to Japan s heavy post-Fukushima energy bills, but oil rates have tumbled by more than half since the summer.
The BoJ s inflation target is a cornerstone of Tokyo s broader scheme to turn around years of tepid growth by generating price rises and prompting firms to boost their hiring and expansion plans.
But the sales tax rise -- Japan s first in 17 years -- slammed the brakes on consumer spending, plunging the economy into recession and throwing Prime Minister Shinzo Abe s growth-boosting programme into question.
Abe s pro-spending policy blitz -- which also calls for major reforms to the highly regulated economy -- had been bearing fruit since its launch two year ago, as it boosted stock prices and pushed the yen down, a plus for exporters.
The tax rise from 5.0 percent to 8.0 percent was introduced to help pay down Japan s enormous national debt, one of the biggest among wealthy nations.
However, faced with souring economic data, Abe delayed a second hike planned for this year to 2017.
"Growth was slower than we had expected but the Japanese economy seems to be heading in the right direction," said Hideo Kumano, chief economist at Dai-ichi Life Research Institute, referring to the latest data.
He added that wage hikes will be key to sustaining a recovery, a point echoed by Abe who has repeatedly called on Japan Inc. to boost workers pay.
Capital Economics Thieliant added: "Apart from a temporary boost from winter bonuses, wages are barely growing."
