Japan’s economy likely suffered a contraction in the first three months of this year, signaling underlying fragility even before U.S. tariff measures started hitting the country in earnest, according to economists surveyed by Bloomberg.
Gross domestic product adjusted for inflation shrank by 0.3% in the first quarter on an annualized basis, according to the median estimate of economists. That result would mean the first quarterly drop in a year.
A decline would cast a shadow over both the Bank of Japan’s plans to steadily continue with policy normalization and Prime Minister Shigeru Ishiba’s election hopes this summer. It also highlights the weaknesses in Japan’s economy even before it was hit by stringent tariffs from its biggest security partner, and raises the chance of a technical recession.
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