Japanese economy contracts in first quarter of 2018


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.



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