Japan says economy contracted 7.1 per cent in 2Q

Japan's economy shrank more sharply in the second quarter than first estimated and the latest indicators suggest only a modest bounce back since then. The world's third-largest economy contracted at an annualized rate of 7.1 per cent in the April-June quarter, according to updated government figures Monday. The initial estimate released earlier this month said the economy contracted 6.8 per cent. Business investment fell more than twice as much as first estimated. The economy's contraction was expected after Japan increased its sales tax from 5 per cent to 8 per cent on April 1. So far, data for the current July-September quarter suggest any rebound in growth is likely to be modest and slow in materializing. A government survey of ‘economy watchers’ released Monday showed confidence in the economy's prospects deteriorated in August, according to AP.