Japan’s economy contracted in the last quarter of 2015, underscores growing concern that Prime Minister Shinzo Abe’s Abenomics is falling short of expectations.
According to revised government data, the Japan’s economy shrank an annualized 1.1 percent in the final quarter of 2015, better than 1.4 percent contraction reported previously and beats 1.5 percent forecast by 29 economists.
“A contraction is a contraction, meaning no change to the picture that Japan’s economy was weak,” Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance Co. in Tokyo, said before the report was released. “Japan’s economic outlook is cloudy because there’s no driver to support a recovery.”
Slowdown in China, Japan’s largest trading partner and continuous rise in yen are concerns for companies and may further abrade their profits.
Companies like Panasonic Corp. had to cut profit forecast for the year ending in March as sales of products fell in China.
Hitachi Ltd. reduced its profit forecast on slower sales of construction machinery in China and reduced demand from oil-producing nations hurt by falling energy prices.