A report from the Cabinet Office on Wednesday showed that Japan's economy shrank 1.7 percent in the second quarter, its biggest economic contraction since the March 2011 earthquake.
The contraction followed the sales tax hike in April and is not expected to persist.
"Looking at monthly data during April-June, sales of electronics goods and those at department stores are picking up after falling sharply in April," Economics Minister Akira Amari said in a statement. "The job market is also improving steadily. Taking these into account, Japan's economy continues to recover moderately as a trend and the effect of the sales tax hike is subsiding."
Private consumption was hit hard by the sales tax hike, falling 5.0 percent in the second quarter.
However, external demand contributed positively, adding 1.1 percentage points to growth after subtracting 0.2 percentage point in the first quarter.
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