Published: Wed, May 16, 2018
Markets | By Otis Pena

Japan's economy contracts annualized 0.6 pct in Jan.-March period

Japan's economy contracts annualized 0.6 pct in Jan.-March period

The limp first-quarter performance was spread across different areas of the economy, according to Marcel Thieliant, senior Japan economist at research firm Capital Economics.

Japan's economy contracted at an annualized rate of 0.6%, marking the end of eight consecutive quarters of economic expansion. "The global economy is performing well and a yen is trading beyond 110 yen against the dollar, so once exports start to grow again, the economy will return to a moderate growth path".

Capital investment was down 0.1 percent.

The preliminary reading for first-quarter gross domestic product compared with a median estimate of a 0.2 per cent annualised contraction in a Reuters poll of economists.

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It was the first decline in nine quarters, snapping the longest stretch of continued expansion since the late 1980s. The median estimate was for consumer spending to remain unchanged.

On a quarter-on-quarter basis, GDP shrank 0.2 percent in inflation-adjusted terms, the Cabinet Office said.

External demand - or exports minus imports - added 0.1 percentage point to first-quarter GDP, as imports slowed more than exports.

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