Japan's economy shrinks April-June as tax raise slams private spending amid revival efforts
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The Japanese economy shrank during the second quarter, at an annual pace of 6.8 percent, according to government data, as spending got slammed by a tax raise that kicked in from April.
Japan's gross domestic product, or the total output of goods and services, contracted 1.7 percent during the April-June period from the previous quarter.
The results released Wednesday had been expected because the consumption-tax raise has weighed on spending. The question now is how long this holding off on spending may last.
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Buyers of major purchases, such as cars, rushed to beat the tax jump, somewhat inflating spending in earlier months.
The government has been trying to revive the world's third-biggest economy by freeing up regulations and encouraging the yen to rise, a move that helps exporters.