Japan’s economy contracts for the first time in four quarters

Japan’s economy shrank for the first time in four quarters in the January-to-March period. Private consumption was virtually unchanged for the first three months of the year.

The Cabinet Office released preliminary gross domestic product figures for the first three months of this year on Friday.

They show the economy contracted by an annualized 0.7 percent in real terms compared with the previous quarter.

The last time GDP shrank was in the January-March period of 2024 as production suspensions following rigged certification tests among automakers took a toll.

Private consumption, which accounts for more than half of Japan’s GDP, grew just 0.04 percent due to the impact of higher prices.

Corporate capital investment rose 1.4 percent thanks to robust spending on software and semiconductor-related equipment, marking a fourth straight quarter of growth.

Exports fell 0.6 percent, while imports climbed 2.9 percent.