Dour outlook for Japan's economy

Japan's economy shrank less than initially estimated in the first quarter but the broad impact from the coronavirus crisis is still expected to send the country deeper into recession.

A series of recent April data including exports, factory output and jobs figures suggested Japan is facing its worst postwar slump in the current quarter as the outbreak forced people to stay at home and businesses to close globally.

The world's third-largest economy shrank an annualized 2.2 percent in January-March, revised data showed on Monday, less than the 3.4 percent contraction indicated in a preliminary reading and compared with a median market forecast of a 2.1 percent drop.

The revised data confirmed Japan had slipped into recession for the first time in four and a half years, after a 7.2 percent contraction in October-December, pressured by 2019's sales tax hike and the US-China trade war. 

On a quarter-on-quarter basis, the economy contracted 0.6 percent in the first quarter compared with an initial reading of a 0.9 percent decline.

Although the emergency was lifted in late May, the economy is expected to recover only moderately in coming months due to the pandemic's impact globally and at home.

Reuters