Published: Wed, May 16, 2018
Finance | By Loren Pratt

Japan's economic system shrinks in January-March quarter

Japan's economic system shrinks in January-March quarter

Japan's longest straight period of expansion in almost three decades ended in the first quarter of this year as the economy shrank at an annualized rate of 0.6 percent.

Fourth quarter growth was revised to an annualized 0.6 percent, down from the 1.6 percent estimated earlier.

Capital expenditure fell 0.1 percent, down for the first time in six quarters, suggesting corporate investment is not as strong as many economists had expected.

The world's third-largest economy is shrinking again.

The poor first quarter snapped a string of eight straight quarters of expansion for the Japanese economy, which had marked the longest such streak in more than three years.

Experts have predicted Japan's economic growth will be weaker this year than in 2017. Moderate inflation is good for an economy as it encourages consumers to spend. However, there are concerns that trade friction with the USA could affect demand for exports.

Japan will on Wednesday release preliminary Q1 numbers for gross domestic product, highlighting a modest day for Asia-Pacific economic activity. The median estimate was for consumer spending to remain unchanged. But his government is contending with scandals over cronyism and sexual harassment that have set off speculation he may be replaced as head of the ruling Liberal Democrats in their next party election.

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