North Asia

Japan’s Economy Shrinks Less Than Expected in First Quarter


Japan’s economy shrank an annualised 0.5% in the first quarter, slightly better than the initial estimate of a 1.0% contraction.

The figure was issued on Wednesday as revised government data.

Consumption remained resilient in the face of resurgent Covid-19 infections, the data show, in an encouraging sign for Japan’s economy.

The revised figure for gross domestic product (GDP) released by the Cabinet Office compared with economists’ median forecast for a 1.0% contraction in a Reuters poll.

On a quarter-on-quarter basis GDP fell 0.1%, compared with the initial minus 0.2% reading and a median forecast for a 0.3% drop.

“Consumption held up well despite prolonged restrictions during the Omicron wave,” said Tom Learmouth, Japan economist at Capital Economics.

“But while Japan’s economy will bounce back this quarter, we think a delayed reopening recovery will look weak when stacked up against the reopening rebounds in other advanced economies last year,” he added.

Japan’s current account surplus shrank sharply in April as record imports overwhelmed exports, swinging the trade balance into the red, data showed.

The surplus stood at 501 billion yen ($3.77 billion) in April, the data showed, down 628 billion yen from the same month a year earlier.

It was the third straight month of a surplus and broadly in line with economists’ median forecast for a surplus of 511 billion yen in a Reuters poll.


  • Reuters, with additional editing by George Russell



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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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