Capital expenditure, a weak link in Japan's rebound so far, rose 1.3 percent in October-December. This marked the quickest growth in two years but was still less than the median forecast for a 1.9 percent gain.
The data adds to recent signs of slackening momentum in the economy, including from a closely-watched leading indicator of capital expenditure that suggests companies could turn more cautious this year due to worries about consumer spending.
In the fourth quarter private consumption, which makes up about 60 percent of the economy, grew 0.5 percent from the third quarter.
That was less that the median estimate for 0.7 percent in October-December, suggesting that a spurt in demand ahead of the sales tax hike is not as strong as anticipated.
The government will increase the sales tax in April to 8 percent from 5 percent, and consumers have been buying cars, homes and durable goods before the tax increase.
Some companies have indicated they are willing to raise salaries during annual wage negotiations with labor unions held in the spring, which is an important barometer of whether Abe's economic policies are working.
Still, some economists worry wage gains will not be strong enough to support consumer spending after the tax hike takes effect.
"Optimists say the last time the sales tax was raised in 1997, consumption stumbled not because of the tax hike but because of a financial crisis," said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.
"But at that time, wages were growing 1.5 percent. Today wages are up just 0.4 percent. So the negative impact on consumers' real purchasing power will be bigger this time."
External demand subtracted 0.5 percentage point from growth, versus the median estimate for a 0.4 percentage point subtraction. The negative contribution is due partly to Japan's expanding domestic demand, which is boosting imports.
However, some economists worry that net exports could subtract from growth this year as companies continue to look for low-cost places outside of Japan to produce their goods, which means they ship less from Japan.
Recent turmoil in emerging markets, have also raised concerns about an external shock harming shipments.
BOJ Governor Haruhiko Kuroda has dismissed the need for additional monetary easing as consumer prices are headed toward its 2 percent inflation target and as overseas economies recover.
At its policy review on Tuesday the BOJ is widely expected to maintain its commitment of increasing base money at an annual pace of 60-70 trillion yen ($585-$683 billion) -- the world's biggest money-printer after the U.S. Federal Reserve started to trim back its own stimulus program since January.
