Japan’s economy shrank at an annualised pace of 1.6 percent in April-June, according to figures released today.

Exports slumped and consumers cut back spending, fuelling concerns that the Japanese economy is at a standstill and heightening pressure on policy-makers to stimulate the economy further.

Prime Minister Shinzō Abe has implemented his own economic policy since gaining power in December 2012, so called ‘Abenomics’. His policy has been based on the “three arrows” of fiscal stimulus, monetary easing and structural reforms, but recent figures show further stimulation may be needed.

Private consumption fell for the first time since June last year by 0.8 percent, down from the previous quarter. Overseas demand knowcked 0.3 percentage points off growth as exports to Asia and the US dropped. The Japanese economy has had a difficult year; in the last quarter of 2014, GDP contracted at an annual rate of 6.8 percent in the second quarter of 2014 – the worst since the earthquake and tsunami disaster hit Japan.

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