Japan's Economy Faces Contraction Amid Persistent Inflation and Spending Cuts

Economic forecasts predict a downturn in Japan's Q1 GDP as households tighten spending in response to inflation and weak wage growth.

Japan's economy is likely to contract by 1.5% annually in Q1 2024, influenced by declines in consumer spending and capital expenditures.
Household spending fell for the 13th consecutive month, driven by inflation and stagnant wage increases.
Capital expenditures dropped as companies hesitated in investing in new technologies and equipment.
The corporate goods price index rose slightly in April, indicating ongoing inflation pressures.
Economists are concerned about the sustainability of economic growth without significant wage hikes and consumer spending.