Japanese economy contracted for the first time in nine quarters

Koichi Kamoshida  Getty Images Koichi Kamoshida  Getty Images

Japan's economy slid into reverse for the first time in 2 years at the beginning of the year, hit by sluggish consumption and a winter cold snap, but analysts predicted the world's third-largest economy would quickly rebound.

"But we need to be mindful of the impact of overseas economic uncertainty and market volatility", he said.

Japan's Economy Minister Toshimitsu Motegi said on Wednesday there was no change to the government's view that the economy was recovering moderately.

Private residential investment also plunged another 2.1 percent after a 2.7 percent fall in the previous quarter.

Japanese government data on preliminary GDP figures for the January-to-March period shows that the country's economy shrank for the first time in 9 quarters.

Given Japan's reliance on export-led growth, trade friction brought on by President Donald Trump's efforts to trim the perennial USA trade deficit has raised uncertainty over the outlook for the economy.

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According to the WSJ, Capital Economics senior Japan economist Marcel Thieliant forecasts annual expansion to slow from 1.7% in 2017 to 1.2% this year.

The economists polled by Reuters were expecting a 0.2 percent contraction following a downwardly revised 0.6 percent annualized rate of expansion in the fourth quarter.

Exports rose 0.6 percent.

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

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.

"The economy is unlikely to continue to contract further. And the economic contraction for January-March may support some ruling officials' call for a delay in a planned sales tax hike", said Kyohei Morita, chief economist at Credit Agricole Securities.

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