TOKYO / BANGKOK (Reuters) – Japan’s economy shrank 1.6% annualized rate in the second quarter of 2015 due to reduced spending on household consumption and a fall in exports.
Private consumption, which accounts for 60% of Gross Domestic Product (GDP) of Japan’s economy, fell 0.8% from the previous period, while external demand reduced growth by 0.3 percentage points since the Exports to Asia and the United States sank.
This is the first fall of the Japanese economy since the April-June 2014, when he had a mild recession after rising 5% tax to 8% sales hit consumption .
The Economy Minister Akira Amari, blamed the contraction to temporary factors such as bad weather kept consumers at home and a tax on mini vehicles.
“The conditions continue to improve as income trends, so it is expected that private consumption will gradually recover,” Amari said in a statement after the data disclosed.
The decline was less severe contraction in the stock markets and expected (1.9%); however, the data adds to signs that the Japanese economy is stagnant and could rekindle market expectations that the Bank of Japan will increase monetary stimulus.
The governor of the Bank of Japan (BoJ), Haruhiko Kuroda believes that the bad data recorded in spring are “temporary,” and called for an upturn during the period from July to September. Continuing contraction, economists believe that the BoJ would have complicated reaching 2% inflation in 2016.
Tokyo stocks advanced Monday with a gain of 0.5% to 20620.26 points.
With information from AFP and Reuters
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