Preliminary gross domestic product data from the Cabinet Office on Thursday showed Japan’s economy shrank 2.0% annualized in the January to March months from the prior quarter, faster than the 1.5% drop seen in a Reuters poll of economists. Downwardly revised data showed GDP barely grew in the fourth quarter. The reading translates into a quarterly contraction of 0.5%, versus a 0.4% decline expected by economists.
” Capital spending, a key driver of private demand, fell 0.8% in the first quarter, versus an expected decline of 0.7%, despite hefty corporate earnings. External demand, or exports minus imports, knocked 0.3 of a percentage point off first quarter GDP estimates. Policymakers are counting on rising wages and income tax cuts from June to help spur flagging consumption.