Published: Wed, May 16, 2018
Money | By Armando Alvarado

Japan's economy just shrunk for the first time in over 2 years

Japan's economy just shrunk for the first time in over 2 years

Economists polled by Reuters last week had expected a contraction of 0.2%.

The world's third largest economy shrank by 0.6 percent on an annualised basis, a much more severe contraction than the median estimate for an annualised 0.2 percent decline.

The economy was hit by stagnant private consumption, fresh data showed.

The Cupboard Workplace mentioned Wednesday Japan's gross home product - the worth of a nation's items and companies - dipped on-quarter 0.2 p.c. However, there are concerns that trade friction with the USA could affect demand for exports.

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The GDP deflator fell 0.2% on year, defying forecasts for a gain of 0.3% following the flat reading in the previous three months.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, lost 2.24 points, or 0.12 percent, to 1,802.91. "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", he said.

Slower export growth reflected a decline in shipments of mobile phone parts and factory equipment in the quarter, a government official said.

According to the WSJ, Capital Economics senior Japan economist Marcel Thieliant forecasts annual expansion to slow from 1.7% in 2017 to 1.2% this year.

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