Big Japanese companies are more confident about conditions now and in the future amid expectations for robust sales and profits, a government survey found.
Separate data today showed stronger-than-expected growth in activity in the services sector in April, underscoring steady personal consumption as jobs and wages improve.
But the data were not enough to convince economists that Japan was quickly emerging from its current soft patch, despite strong growth figures for the first quarter.
Top Bank of Japan (BOJ) officials indicated the central bank would take its time in shifting from its policy framework of flooding the markets with excess funds, although they remained optimistic on the economy.
"We should see a recovery become clearer in the second half of the year. It should be moderate but sustained," BOJ Governor Toshihiko Fukui said.
At its policy-setting meeting in May, the BOJ allowed for temporary shortfalls in its funds target, which vastly exceeds the amount of funds commercial lenders must keep at the central bank, effectively a step toward reversing its current hyper-loose monetary easing.