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HomeUncategorizedJapan's GDP contracts, complicating BOJ's rate hike plans

Japan’s GDP contracts, complicating BOJ’s rate hike plans

By Satoshi Sugiyama and Tetsushi Kajimoto

TOKYO (Reuters) – Japan’s economy contracted in the first quarter, squeezed by weaker private consumption and external demand and throwing a fresh challenge to policymakers as the central bank looks to lift interest rates away from near-zero levels.

Preliminary gross domestic product (GDP) data from the Cabinet Office on Thursday showed Japan’s economy shrank 2.0% annualised in January-March from the prior quarter, versus a 1.5% drop seen in a Reuters poll of economists. It followed a slightly positive reading in the fourth quarter.

The reading translates into a quarterly contraction of 0.5%, versus a 0.4% decline expected by economists in the Reuters’ poll.

Private consumption, which accou

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