Japan's Economy Shrinks, but Less than Previously Thought
The Japanese economy shrank at an annual rate of 1.8% in the first quarter of this year, slightly better than the initial estimate at a 2.0% contraction, according to revised government data on June 10.
The revision was due to private sector investments, at minus 0.4%, up from the previous minus 0.5%.
Seasonally adjusted real gross domestic product, or GDP, a measure of the value of a nation's products and services, remained in negative territory, as exports and consumption declined from the previous quarter.
Quarter-to-quarter, the economy slipped 0.5% in the January-March period, according to the Cabinet Office, unchanged from last month's results.
The annual rate measures what would have happened if the quarterly rate lasted a year.
Wage growth has been slow, and prices on imports have risen as the Japanese yen declines against the US dollar. The dollar is trading at nearly 157 yen lately, up from about 140 yen a year ago.
The weak yen has tourism booming. But it makes imports more expensive, a sore point for a nation that imports almost all its energy.
Sluggish consumer spending has also been a drag on the economy. Private consumption accounts for half of Japanese economic activity.
Investors are also watching closely for the next action from the Bank of Japan, whose monetary policy board meets later this week. The central bank raised interest rates earlier this year for the first time since 2007.
Unemployment has stayed relatively low in the world's fourth largest economy at about 2.6%. Japan suffers a serious labor shortage, as its birth rate continues to drop, hitting a record low last year. The number of marriages have also fallen.
Japan's GDP is expected to slip to fifth place in size after the US, China, Germany and India next year, according to the IMF.
