Japan economy shrinks unexpected 1.8% in second quarter

Second-quarter gross domestic product (GDP) shrivelled 1.8 percent from the previous three months, worse than the previously estimated fall of 1.7 percent, Japan's Cabinet Office saidJapan’s economy shrank more than estimated in April-June, revised data showed Monday, piling pressure on the government to delay another sales tax hike, while the central bank faces calls to expand its stimulus. The figures will come as a blow to Prime Minister Shinzo Abe as his programme aimed at rejuvenating growth struggles to gain traction. The disappointing result was largely caused by the negative impact of April’s sales tax hike, the first for 17 years, which was introduced to lift revenue and reduce the country’s massive national debt. A huge monetary easing campaign by the Bank of Japan (BoJ) was a cornerstone of the programme.

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