TOKYO?Japan's economy expanded at a faster pace than expected in the third quarter to post its longest stretch of growth in three years as exports rebounded.

Gross domestic product expanded an annualized 2.2% in the three months to the end of September, government data showed Monday. The reading was higher than a 0.9% expansion forecast by economists polled by The Wall Street Journal. It also marked the third straight quarter of expansion after a patchy economic performance in the three years since the summer of 2013.

The figure will likely come as welcome news for Prime Minister Shinzo Abe, who has been trying to re-energize the economy since taking power at the end of 2012 with a brew of monetary and fiscal stimulus that he calls Abenomics.

The data showed overall GDP grew as exports rebounded from a fall the previous quarter.

While overseas demand helped lift GDP, domestic demand was weak.

Household spending?accounting for 60% of GDP?was flat in the third quarter. Economists say that households are still hesitant to spend because many workers haven't seen significant pay increases.

Businesses were also reluctant to invest. Capital spending was also flat, following two quarters of contraction.

Many Japanese firms have complained that a stronger yen is making items produced in Japan and sold abroad less competitive, or that the stronger currency is eating into repatriated profits.

Foreign demand contributed a net 0.5 percentage points to growth, while domestic demand contributed only 0.1 percentage point.

Still, the overall growth figure was better than most economists' estimate of Japan's potential growth rate. The Bank of Japan most recently estimated the rate at 0.24%, while the Cabinet Office estimated it at 0.3%.

Write to Eleanor Warnock at eleanor.warnock@wsj.com and Mitsuru Obe at mitsuru.obe@wsj.com

(END) Dow Jones Newswires

November 13, 2016 20:15 ET (01:15 GMT)

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