The Japanese economy has shrunk by 0.2 % more than three months ago

Initial government data on Friday showed that the Japanese economy was shrinking for the first time in a year, as it contracted 0.2 % in the quarter -March with a sharp decrease in exports.

The gross domestic product data was poorer compared to contraction by 0.1 % expected by Reuters economists.

On an annual basis, GDP in Japan has contracted 0.7 % in the first quarter, which is also more than 0.2 % decrease through a Reuters poll.

Exports fell 0.6 %, a quarter of a quarter of a quarter, when 0.8 percentage points from gross domestic product fell, as the uncertainty caused by US President Donald Trump’s policies caused the heavy economy in Japan.

However, on an annual basis, GDP in Japan’s expansion by 1.7 %, the largest expansion since the first quarter of 2023 and show stronger compared to growth of 1.3 % in the fourth quarter.

Japan’s gross domestic product data comes at a time when the country is imprisoned in trade negotiations with the United States, with no initial talks between both sides so far that does not result in a conclusive deal.

Bank of Japan recently warned On May 13, the country’s economy is likely to move forward, saying that this will be due to the effects of commercial policies around the world.

“The trauma of negative demand is expected, including the impact of the increasing uncertainty on fixed investment in business and family consumption, a decrease in exports to the United States and the deterioration in the export profitability in Japan,” BOJ Books.

The Central Bank indicated that the US tariff policy will exert low pressure on both economic activity and prices in Japan.

Despite these growth concerns, the central bank appears to be ready to continue to raise the policy price, with Some members of BoJ Board says The goal of the bank’s inflation is 2 %, and will continue to raise the policy price if its outlook for economic activity and prices is achieved.

Inflation in Japan BOJ’s goal exceeded 2 % for three consecutive years, with a 3.6 % in April.

However, other members of the Board of Directors also warned that expectations are unconfirmed, and that the bank must “study the possibility of upscale and dramatic deviations from its view of monetary policy as necessary.”

Bank of Japan maintains prices At 0.5 % on May 1 for the second meeting in a row.