Japan Sinks Into a Recession With Far Steeper Fall Looming

Japan’s economy sank last quarter into a recession that’s likely to deepen further as households limit spending to essentials and companies cut investment, production and hiring to stay afloat amid the coronavirus pandemic, Bloomberg News reported. Gross domestic product shrank an annualized 3.4% in the three months through March from the previous quarter as exports slid and social distancing crimped consumer spending, Cabinet Office figures showed Monday. While the result was slightly better than an expected 4.5% drop, helped by a downgrade of the previous quarter’s contraction, economists and policy makers agree that worse is in store in the current quarter. Two consecutive quarters of shrinking GDP confirm that the world’s third-largest economy fell into a recession even before Prime Minister Shinzo Abe’s April declaration of national emergency. Analysts see a 21.5% contraction in the three months through June, a record for official data going back to 1955. “There’s no doubt that this quarter has gotten much worse,” said economist Takeshi Minami at Norinchukin Research Institute. Read more