Japan's economy grew at a faster-than-expected 2.4 percent annual pace in the January-March quarter, suggesting a recovery is gaining traction despite persisting weakness in corporate and household spending, the Associated Press reports.

About 2 percentage points of the first quarter's growth reflected an increase in inventories stemming from the plunge in demand that followed a sales tax increase in April 2014. An increase of 7.5 percent in housing investment also drove growth.

Overall trends for the economy are positive, said Masamichi Adachi, an economist with JPMorgan in Tokyo. Lower costs for oil and gas imports thanks to the plunge in crude oil prices as one big plus, he said.

"We see a huge income shift from the oil exporters to the importers like Japan," he said. A windfall for corporate profits from the yen's depreciation against other currencies is also helping.

"People's confidence is getting a little better," he said.

But there is still little sign of the kind of increase in consumer and business spending needed for a sustainable recovery, he said.

The data reduce the likelihood the Bank of Japan will opt to expand its lavish monetary stimulus at a policy meeting later this week, the AP says.

Economists are divided over whether the recovery is finally on track after years of tepid growth.

The increase in private sector inventories in the last quarter suggests persistent weakness in domestic demand. Exports also were a net drag on growth.

Public investment plunged 5.5 percent, though real incomes rose 0.6 percent, helping to underpin demand.