The Japanese economy contracted by 0.2 percent in January-March period compared to previous three months, says the Cabinet office.
Weak private consumption is considered the major reason behind the contraction. Temporary factors like stock market sell-offs and higher vegetable prices due to bad weather also contributed.
The contraction that follows eight consecutive quarters of growth is not seen by experts as the beginning of a downswing in the economy.
“Consumers will keep purse strings tight unless the pace of wage increases shows a clear acceleration,” SMBC Nikko Securities Chief Market Economist Yoshimasa Maruyama told DW.
Exporters in Japan are also in a difficult situation as the currency, Yen, has been strengthening against other major currencies.