Japan's Economy Faces a 0.7% Shrink Amid Trade Policy Concerns

Japan's economy shrank by 0.7% annually in the first quarter, highlighting a fragile recovery. The contraction was larger than expected, spurred by concerns over U.S. trade policies. Quarter-on-quarter, the GDP shrank by 0.2%, exceeding forecasts of a 0.1% decline.

Japan's economy has witnessed a significant downturn, contracting by an annualized 0.7% in the first quarter, according to newly released data. This downturn is more pronounced than analysts' predictions and signals a potentially unstable recovery threatened by the trade policies of U.S. President Donald Trump.

The contraction in Japan's real gross domestic product (GDP) exceeded median market expectations, which anticipated a more modest drop of only 0.2%. These figures reflect growing concerns around international trade relations.

On a quarter-on-quarter basis, the Japanese economy shrank by 0.2%, surpassing market forecasts that had predicted a slight 0.1% contraction, thus raising alarms over the nation's economic stability and its future growth trajectory.

(With inputs from agencies.)