Japan stocks flat after economy dodges recession

Japanese stocks closed little changed after data showed the economy dodged a recession, growing at an annual pace of 1.7% in the first quarter of the year.

The better-than-expected growth rate came after higher government spending helped to offset weakness in business investment and exports.

Capital expenditure fell by 1.4% during the quarter, indicating that businesses remain reluctant to spend.

Japan's benchmark Nikkei 225 index fell slightly to 16,644.69.

The broader Topix index ended up 0.2% at 1,338.38.

Despite the better-than-expected GDP figure, analysts are concerned about the outlook for consumer spending, which accounts for about 60% of GDP.

That could take a hit if Prime Minister Shinzo Abe moves to increase the country's sales tax to 10% from the current 8%.

Japan's Nikkei newspaper reported this week that Mr Abe plans to postpone the move and will announce his decision after the G7 meeting later this month.

Rest of Asia

Other stock markets in Asia were lower ahead of the release of the US central bank's meeting minutes later on Wednesday.

Investors are looking for guidance on what and when the Federal Reserve's next move is going to be.

Many investors are now predicting the Fed may raise interest rates at its June meeting following a recent run of positive economic data.

Hong Kong's Hang Seng index fell 1.5% to close at 19,826.41 while the mainland Shanghai Composite dropped 1.3% to finish at 2,807.51.

Australia's S&P/ASX 200 index lost 0.7% to finish at 5,356.20, while South Korea's benchmark Kospi index fell 0.6% to close at 1,956.73.