Japan economy shrinks in first quarter – but less than expected

Economy contracted 3.9 percent, with the virus impacting personal consumption, posing the first fall in three quarters.

Japan’s economy shrank at a slower-than-initially reported pace in the first quarter, on smaller cuts to plant and equipment spending but the coronavirus pandemic still dealt a huge blow to overall demand. Separate data showed growth in bank lending slowed sharply in May, while real wages posted the biggest monthly jump in more than 10 years in April, in signs that the world’s third-largest economy was gradually overcoming last year’s pandemic hit. Among the mixed indicators are some reassuring signs for policymakers, who are worried Japan’s recovery will lag behind chief economies that have rolled out COVID-19 vaccines much quicker and are able to reopen faster.