The consumption tax hike last quarter drove the economy into its biggest contraction since the March 2011 quake and tsunami, Cabinet Office data showed Wednesday, keeping policymakers under pressure to expand fiscal and monetary stimulus should recovery falter again.
The April 1 consumption tax rise took a heavy toll on household spending, shrinking the world's third-largest economy by an annualized 6.8 percent from April through June, and wiping out growth of 6.1 percent seen in January-March as consumers went on a shopping spree to avoid the higher levy.
The median market forecast was for a 7.1 percent drop.