Japanese economy contracts further, raises pressing challenge for new leader

The second quarter had seen Japan’s virus-beaten economy slipping further into its sharpest postwar recession. This came after businesses in the country were monitored struggling worse than previously estimated, highlighting the pressing challenge the new prime minister faces to save the ailing economy.

The world’s third-biggest economy recorded a 28.1% contraction from April to June. This came larger than the preliminary reading of a 27.8% contraction, revised gross domestic product data showed on Tuesday. The figure also fell in line with the median market forecast of a 28.6% contraction rendered by a Reuters survey,

Other data emphasized the concern as household spending and wages dropped in July. This could be attributed to the growing damage of the pandemic, directly hitting consumption even though lockdown restrictions were lifted in May.