Japan's economy contracted during 2Q11 at a slower than expected pace by an annualised rate of 0.3 percent in the three months to the end of June, the cabinet office said.
Real GDP was down 1.3 percent and showed stronger signs of recovery thanks to consumer spending in the wake of the March earthquake and tsunami disaster. Analysts had been expecting a drop of 2.6 percent for the quarter.
On the news the MSCI Asia Pacific Index climbed 1.9 percent in Tokyo and the Nikkei 225 was up 1.37 percent. The country's largest car manufacturer by value, Toyota Motors, rose 2.9 percent.
European markets opened higher with the FTSE MIB Index up four percent, Euro Stoxx 50 up 0.87 percent and the Swiss index rising 2.15 percent.