Japanese economy contracted for the first time in nine quarters

Koichi Kamoshida  Getty Images Koichi Kamoshida  Getty Images

Koichi Kamoshida Getty Images Koichi Kamoshida Getty Images

Private consumption and capital expenditure slowed during the January to March quarter, which analysts said dragged down the economy.

That snaps a run of eight quarters of consecutive growth, the longest Japan has achieved since the boom days of the late 1980s.

Japan's economy relies on exports of electronics, among other products.

Japan's economy, the world's third largest, shrank by 0.6 percent on an annualized basis, a much more severe contraction than the median estimate for an annualized 0.2 percent decline.

Export demand added 0.1% to first quarter GDP but the rate of growth is slowing.

Private consumption accounts for about 60% of Japan's economic activity.

Exports rose 0.6 percent.

Economists polled by Reuters last week had expected a contraction of 0.2%.

"Globally, IT-related items have been in an adjustment phase, which weighed down Japan's exports and factory output", said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities.

According to the Japanese government, real GDP fell by 0.2% in the three months to March, undershooting expectations for an unchanged reading for the quarter.

But potential fallout from Sino-U.S. trade frictions and global protectionism cloud the outlook for Japan's export-reliant economy in the coming quarters, they say.

"The economy is unlikely to continue to contract further".

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