Japanese economy posts second-quarter contraction

The Associated Press , Tokyo Wed, 08/13/2008 9:38 AM Business
Japan's GDP contracted in the second quarter as the world's second largest economy succumbed to the pressures of high oil prices and the prospects of a global slowdown.
Japan's gross domestic product, or the total value of the nation's goods and services, in the April-June period shank at an annual pace of 2.4 percent, a sharp downturn from a 4.0 percentrise registered in the first quarter, the Cabinet Office said Wednesday.
The last time GDP turned negative was in April-June 2007.
On a quarterly basis, GDP contracted 0.6 percent from a 0.8 percent increase in the January-March period.
The data provided further evidence that the world's second largest economy has ended its six-year expansion, and may now be perilously close to a recession.
Private consumption, which accounts for more than half of real GDP, dropped 0.5 percent from the previous quarter.
Two main drivers ofJapan's six-year economic recovery - business investment and exports - also weakened as expected.
Private-sector investment in factories and equipment fell 0.2 percent, while overall exports of goods and services slid 2.3 percent. (***)