Q2 GDP rises annualised 3.1 vs f39;cast 2.1
Consumption up for the first time in 5 quarters, Capex bounces
Lift in consumption, economic recovery point to another BOJ hike
BOJ is global outlier in hiking rates as peers move to policy easing

TOKYO, Aug 15 Reuters Japan39;s economy expanded by a much fasterthanexpected annualised 3.1 in the second quarter, rebounding from a slump at the start of the year thanks to a strong rise in consumption and backing the case for another nearterm interest rate hike.

The Bank of Japan had forecast that a solid economic recovery will help inflation sustainably hit its 2 target, and justify raising interest rates further after it hiked them last month in its continued quest to exit years of massive monetary stimulus.

The increase in gross domestic product GDP compared with a median market forecast for a 2.1 gain, and followed an upwardly revised 2.3 contraction in the first quarter, government data showed on Thursday.

The reading translates into a quarterly rise of 0.8, beating a 0.5 increase expected by economists in the Reuters39; poll.

The results are simply positive overall, with signs for a pickup in private consumption backed by real wage growth, said Kazutaka Maeda, an economist at Meiji Yasuda Research Institute.

It supports the BOJ39;s view and bodes well for further rate hikes, although the central bank would remain cautious as the last rate increase had caused a sharp spike in the yen.

Private consumption, which…