AFP, Tokyo :
Japan’s economy contracted last quarter, official data showed Monday, boosting speculation the central bank will be forced to unleash more stimulus as Tokyo’s “Abenomics” growth blitz stumbles.
The world’s third-largest economy shrank 0.4 percent in the three months to June-or 1.6 percent on an annualised basis-due to weak consumer spending at home and slowing exports after two consecutive quarters of growth. Still, the figures published by the Cabinet Office came in slightly better than market expectations for a fall of 0.5 percent, or a 1.8 percent annualised drop.
Private consumption, which accounts for about 60 percent of Japan’s GDP, fell 0.8 percent from the previous three months while exports dropped 4.4 percent.
“The sharp plunge from the previous quarter’s surprise growth was partly due to disappointing demand for Japanese products in the US, Chinese and other” markets, SMBC Nikko Securities said in a commentary.
“Sluggish wage growth and bad weather drove down consumption at home,” it added. The downturn follows stronger-than-expected growth in the first quarter due to a pickup in capital spending, with Japanese firms generally reporting upbeat profits.
Japan on Monday revised up its reading for the January-March period for the second time to a 1.1 percent expansion, sharply higher than an initial estimate of 0.6 percent growth.
Japan’s economy contracted last quarter, official data showed Monday, boosting speculation the central bank will be forced to unleash more stimulus as Tokyo’s “Abenomics” growth blitz stumbles.
The world’s third-largest economy shrank 0.4 percent in the three months to June-or 1.6 percent on an annualised basis-due to weak consumer spending at home and slowing exports after two consecutive quarters of growth. Still, the figures published by the Cabinet Office came in slightly better than market expectations for a fall of 0.5 percent, or a 1.8 percent annualised drop.
Private consumption, which accounts for about 60 percent of Japan’s GDP, fell 0.8 percent from the previous three months while exports dropped 4.4 percent.
“The sharp plunge from the previous quarter’s surprise growth was partly due to disappointing demand for Japanese products in the US, Chinese and other” markets, SMBC Nikko Securities said in a commentary.
“Sluggish wage growth and bad weather drove down consumption at home,” it added. The downturn follows stronger-than-expected growth in the first quarter due to a pickup in capital spending, with Japanese firms generally reporting upbeat profits.
Japan on Monday revised up its reading for the January-March period for the second time to a 1.1 percent expansion, sharply higher than an initial estimate of 0.6 percent growth.
