Continues To Contract

The Japanese economy shrank 0.3% in this year’s second quarter (2Q) from the preceding Q, or at an annualized pace of 1.3% in real terms the Government said recently.
But the rate of decline in the world’s third largest economy was lower than what many analysts had forecast.
It was the third consecutive quarterly decline in GDP following an October-December 2.5% annualized contraction and 3.6% in the January-March Q. The Cabinet Office blamed the decline primarily on slumping exports in the wake of the devastating earthquake and tsunami that hit the northeastern part of the country in March.
Those events impacted many auto, electronics and other parts makers’ plants causing disruptions to supply chains. They also triggered the nuclear crisis at the Fukushima No. 1 plant and resulted in the shutdown of many other nuclear power plants across the country causing power shortages.
Many analysts however now expect GDP growth to return to positive territory in the July-September Q as industrial production is recovering more rapidly than earlier projections had forecast (Payload Asia).