Japan GDP contracts more than expected, clouds BoJ rate plans

(Sharecast News) - Japan's economy unexpectedly shrank in the first quarter as consumers tightened their belts in response to stagnant wage growth, companies cut spending and exports fell. Gross domestic product contracted 2% on an annualised basis in the three months to March 30, the Cabinet Office said on Thursday. The figure compare with a forecast contraction of 1.2% and now clouds the outlook for the Bank of Japan's plans to lift interest rates.

Growth was also hit by issues at car maker Toyota's subsidiary Daihatsu where the government ordered a total production shutdown because of faked safety test results.

Reporting by Frank Prenesti for Sharecast.com