Japan's economy shrinks 1.7% in April-June, govt data shows

Employees of Toyota Motor's subsidiary Toyota Motor Kyushu mount an engine into the body of a Lexus NX, on an assembly line at the Miyata Plant in Fukuoka Prefecture, on August 8, 2014Japan’s economy shrank by 1.7 percent in the three months to June, underscoring the impact of a sales tax hike as consumption and housing investment dropped sharply, government data showed Wednesday. The world’s number-three economy had been on the upswing as Prime Minister Shinzo Abe’s growth blitz, dubbed Abenomics, helped sharply weaken the yen, giving a lift to exporters’ profitability and driving a stock market rally last year. “After the consumption tax hike, private spending, housing-related investment and corporate capital spending rapidly fell, leading to the bigger-than-expected fall,” Credit Suisse said in a note before the figures were published.

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