Japan Economy Shrinks in Q3

Japan’s economy shrank more than initially thought in the third quarter, revised figures showed on Monday.  The economy shrank an annualized 1.9 percent in the July-September quarter, revised figures showed, worse than expectations for a 0.5 percent contraction in a Reuters poll and down from an initial 1.6 percent contraction recorded in November.

On a quarter-on-quarter basis, the economy contracted 0.5 percent, compared with an initial 0.4 percent contraction.  Japan’s economy tipped into a recession during the third quarter as the economy continued to struggle with the impact of a consumption tax hike to 8 percent from 5 percent in April.

The reading led Prime Minister Shinzo Abe to delay a second tax hike, initially scheduled for October 2015, by 18 months and to call snap elections as he seeks a fresh mandate for Abenomics – a series of monetary and fiscal stimulus and and long-term structural reforms unveiled last year to kickstart the Japanese economy.


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