Japanese economy contracted for the first time in nine quarters

Koichi Kamoshida  Getty Images Koichi Kamoshida  Getty Images

Koichi Kamoshida Getty Images Koichi Kamoshida Getty Images

Japan will on Wednesday release preliminary Q1 numbers for gross domestic product, highlighting a modest day for Asia-Pacific economic activity. Economists has forecast annualized contraction of around 0.2%.

Experts emphasized they viewed the first-quarter contraction as a pause rather than the beginning of a protracted downswing, with the global economy still picking up.

External demand - or exports minus imports - added just 0.1 percentage point to first-quarter GDP as imports slowed more than exports.

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Australia will provide Q1 data for wage prices, which are expected to hold steady at 0.6% on quarter and 2.1% on year.

"Globally, IT-related items have been in an adjustment phase, which weighed down Japan's exports and factory output", said SMBC Nikko Securities economist Yoshimasa Maruyama.

Japanese government officials expect the decline to be temporary.

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Economists say while the contraction is temporary, the rebound will not be almost as strong as previous quarters. It ended the longest straight period of uninterrupted growth since the late 1980s.

Capital expenditure fell 0.1 percent, down for the first time in six quarters, suggesting corporate investment is not as strong as many economists had forecast.

Japan's economic system shrank at an annualized charge of 0.6 p.c within the quarter by March, as personal funding and public spending declined.

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The world's third-largest economy is shrinking again.

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