Japan\\\'s economy shrinks after sales tax rise

Japan's economy suffered its biggest quarterly contraction since the 2011 quake and tsunami as a sales tax rise slammed the brakes on growth, data showed Wednesday, throwing into question plans for another increase next year. The 1.7 per cent dip in gross domestic product for the second quarter -- or a 6.8 per cent contraction at an annualised rate -- gave the clearest picture yet of the impact of the levy rise. The weak figures may force Tokyo to reassess another planned tax increase next year, a move aimed at finding new revenue sources to shrink the massive national debt. While the April-June figure was slightly better than market expectations, it appeared at odds with the government and Bank of Japan's view that the impact of the rise on the world's number-three economy had been minimal. Still, Prime Minister Shinzo Abe acknowledged that his administration had some work to do. ‘The contraction was within market expectations, but the decline in private consumption was bigger than we thought,’ Yoko Takeda, chief economist with Mitsubishi Research Institute said, according to AFP.