Markets

Japan GDP Slides In 1st Quarter Ending 8 Quarters Of Growth

Japan GDP Slides In 1st Quarter Ending 8 Quarters Of Growth

However, a breakdown of the data shows export growth is losing momentum, expanding just 0.6 percent in the first quarter after growth of 2.2 percent October-December previous year. Economists has forecast annualized contraction of around 0.2%.

GDP is expected to be flat on quarter and slip 0.1% on year after adding 0.4% on quarter and 1.6% on year in the three months prior. However, there are concerns that trade friction with the U.S. could affect demand for exports.

Economists say Japan's first-quarter contraction is temporary, but the rebound will not be almost as strong as previous quarters.

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

Japan's economy contracted at an annualized rate of 0.6%, marking the end of eight consecutive quarters of economic expansion. In the first quarter exports expanded by 0.6% after 2.2% growth in the previous quarter.




"There are worries about some emerging economy markets but the global economy as a whole is likely to continue its recovery for some more time".

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.

But SMBC Nikko Securities chief market economist Yoshimasa Maruyama warned that private consumption was weak even when the special factors were taken into consideration.

Under Prime Minister Shinzo Abe, the world's third-largest economy has picked up steam through a deflation-fighting stimulus program driven mainly by asset purchases by the central bank that are injecting billions of dollars into the economy each year.

Consumers will keep purse strings tight "unless the pace of wage increases shows a clear acceleration", he said in a commentary published ahead of the data release.