Japan's economy contracted last quarter as consumers and businesses cut spending, putting pressure on Prime Minister Shinzo Abe to return his focus to his economic policies, dubbed "Abenomics."
Gross domestic product fell an annualized 1.6 percent from January-March, ending two quarters of growth, the Cabinet Office said Monday. The median estimate in a Bloomberg survey was for a 1.8 percent drop.
The slump in the world's third-biggest economy is a setback for Abe, whose support has suffered as he has championed unpopular defense bills and the restart of nuclear reactors. Bank of Japan Gov. Haruhiko Kuroda is counting on weakness to fade this quarter as he chases an elusive 2 percent inflation target with unprecedented monetary stimulus.