Economy

Japan Q1 GDP contracts annualised 0.6%: government

Japan Q1 GDP contracts annualised 0.6%: government”

Economists say while the contraction is temporary, the rebound will not be almost as strong as previous quarters.

Japan's economy relies on exports of electronics, among other products.

Private consumption, the largest part of the Japanese economy, was unchanged, a result that was in line with market expectations.

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.

But potential fallout from Sino-U.S. trade frictions and global protectionism cloud the outlook for Japan's export-reliant economy in the coming quarters, they say.

Economists don't expect the period of contraction to last long.

"The economy is not headed for a recession", said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities.

Capital expenditure likely rose 0.4 percent, versus a 1 percent gain in the previous quarter, led by demand for factory automation and labor-saving technologies as companies tried to cope with a labor shortage.

Japan's economy contracted at an annualized rate of 0.6%, marking the end of eight consecutive quarters of economic expansion. The median estimate was for a 0.4 percent increase.

Consumer spending fell marginally, registering a decline of less than one percentage point in the first quarter.

"The economy is unlikely to continue to contract further".



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