Japan's economy, affected by both international and domestic factors, grew slower than expected during the April-June period, hinting the world's third-largest economy, as with other stronger world economies, may be headed for a slowdown.

According to the Cabinet Office on Monday, Japan's economy, based on revised readings, slid down both year-on-year and from a quarter ago.

Year-on-year, the world's third-largest economy grew 0.7 per cent during the April to June period, down from an earlier estimate of 1.4 per cent.

Quarterly, Japan's economy was also down by 0.2 per cent. The January to March figure hit 0.3 per cent.

The Cabinet Office said decelerating exports and passive local demand were the culprit that affected Japan's growth during the April to June period.

"This is a very significant revision. It means that overall production and investment in Japan was lower than the government had previously estimated," analyst Martin Schulz told the BBC. "As a result, the economy is slowing much faster than expected."

Capital spending was revised vaguely downwards to a 1.4 per cent jump from the previous quarter. The initial figures showed a 1.5 per cent growth. While private consumption, which accounts for majority or 60 per cent of GDP, was basically untouched from an initial estimate of a 0.1 per cent uptick.

Legislators need to take immediate action in the coming months to support growth and push domestic demand.

"Support from reconstruction demand was not as strong as we had previously expected," Yuichi Kodama, chief economist, with Meiji Yasuda Life Insurance in Tokyo, told Reuters News.

"Japan's economy is probably at a standstill in July-September as the overseas economy has been slowing more rapidly than expected."

While the Credit Suisse Group AG in Tokyo said Japan's economy could further contract in the third quarter.