Japan suffers record contraction during Q2 due to Covid-19

Japan suffered its biggest economic contraction on record in the second quarter as the coronavirus pandemic hit consumption and exports, mounting pressure on policymakers to take bolder action to prevent a deeper recession.

The third straight quarter of declines knocked the size of real gross domestic product to decade-low levels, wiping out the benefits brought by Prime Minister Shinzo Abe’s “Abenomics” stimulus policies that were introduced in late 2012.

While the economy is emerging from the doldrums after movement restrictions were lifted in late May, many analysts expect any rebound in the current quarter to be modest as a renewed rise in infections keeps consumers’ purse strings tight.