Japan's economy shrank for the first time in a year, affected by weak consumption and a drag from net trade.

Jin10 Data reported on May 16 that Japan's actual GDP annualized quarterly rate preliminary value for the first quarter recorded -0.7%, indicating that the Japanese economy has contracted for the first time in a year. Even before experiencing the impact of Trump's tariff measures, its vulnerability had already been exposed. Following a significant boost in the previous quarter, a decline in exports and a surge in imports have led to a drag on the economy from net trade in the first three months of this year. Consumption expenditure, which accounts for about half of the total economy, remained basically flat, while consumption is still below pre-pandemic levels due to inflation weakening purchasing power. This contraction may also trigger ongoing political debates about whether to implement tax cuts or cash subsidies before the summer Senate elections this year.