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Japan’s Sputtering Recovery Offers Support for BOJ Stimulus Case

  • Economy shrinks as import bill soars on energy costs, weak yen
  • Consumer spending flatlines as omicron restrictions take toll
Customers dine inside an Izakaya restaurant in the Shimbashi District of Tokyo.

Customers dine inside an Izakaya restaurant in the Shimbashi District of Tokyo.

Photographer: Toru Hanai/Bloomberg
Updated on

Japan’s economy shrank in the first three months of this year as a soaring import bill and the hit from omicron pushed its pandemic recovery into reverse, offering some support for the Bank of Japan’s view that stimulus should continue for now.

Gross domestic product contracted at an annualized pace of 1% in the quarter through March, the Cabinet Office reported Wednesday. Economists had expected a decline of 1.8%.