Japan's biggest contraction in more than five years adds to escalating concerns among policymakers about the length of a likely recession in the world's third-largest economy as the impact of the coronavirus and a plunge in oil prices causes markets to slide and the yen to gain.

Revised data showed gross domestic product shrank faster than first thought in the October-December quarter, contracting at an annualized pace of 7.1 percent as a tax hike walloped consumption amid a global slowdown, and businesses cut capital spending at the fastest pace since the global financial crisis. The preliminary annualized figure was 6.3 percent.

The worse-than-expected data show that the economy was already in a highly fragile state when the virus started to slam exports, supply chains, tourists and shoppers. With sentiment among markets and consumers rapidly deteriorating, the prospect of a turnaround in corporate spending that could help support the economy this quarter seems remote, adding to pressure on policymakers to respond.