The International Monetary Fund on Monday forecast Japan's economy will grow 1.2 percent this year, up 0.5 percentage points from its October estimate, as a broad-based global recovery has gathered steam.

In its latest World Economic Outlook, the IMF raised its global growth projection by 0.2 points to 3.9 percent in 2018 and by 0.2 points to 3.9 percent in 2019, partly due to the expected impact of U.S. tax cuts introduced by President Donald Trump's administration.

"As the year 2018 begins, the world economy is gathering speed," IMF chief economist Maurice Obstfeld said. "The recent U.S. tax legislation will contribute noticeably to U.S. growth over the next few years, largely because of the temporary exceptional investment incentives that it offers."