Japan’s Economy Shrinks More Than Expected In Second Quarter, Heightens Woes For New Leader

The data underscored the daunting task the new prime minister, to be elected in a ruling party leadership race on Sept. 14, faces in seeking to contain the pandemic while avoiding restrictions on business activity.

The world’s third-largest economy shrank an annualised 28.1% in April-June, more than a preliminary reading of a 27.8% contraction, revised gross domestic product (GDP) data showed on Tuesday, suffering its worst postwar contraction.

The record drop roughly matched a median market forecast of a 28.6% contraction in a Reuters poll.

The main culprit behind the revision was a 4.7% drop in capital expenditure, a much bigger fall than a preliminary 1.5% fall, a sign the COVID-19 pandemic was hitting broader sectors of the economy.