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Thursday, 11th June 2009
In Business In Japan,

Record contraction for Japanese economy

The Japanese economy has contracted 14.2 per cent on an annualised basis during the first three months of the year.

This is lower than forecasts that suggested the economy may have shrunk more than 15 per cent in the first quarter.

However, the contraction remains the largest since the second world war, with GDP down 3.8 per cent from the final quarter of 2008.

In response to the figures, the Nikkei 225 index breached the 10,000-point marker for the first time since October last year.

Ryuta Otsuka, Toyo Securities strategist, told AFP there is increasing optimism about a recovery in the Japanese economy.

Mizuho Research Institute senior economist Yasuo Yamamoto told Reuters the organisation expects growth to be recorded in Q2, with this continuing until the first quarter of 2010.

"Beyond that, the outlook is unclear because of the upcoming election and what policies the election outcome will lead to," the economist added.

Written by Mark Smith

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