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Japan back in recession as earthquake cuts consumption
Japan is struggling to restore damaged production lines
Japan's economy, the world's third largest, has slid back into recession after thedevastation caused by the earthquake and tsunami in March.
Gross domestic product shrank 0.9% in the first three months of the year, the Cabinet office said, giving an annualised rate of contraction of3.7%.
Analysts say consumption and exports were worst hit.
Japan's economy has now contracted for two quarters in a row, the generally accepted definition of a recession.
Japan sank into arecession during the global financial crisis, but had emerged from it in 2009.
The contraction in the first three months of this year was bigger than expected, with most analysts expecting the annualisedrate would show a contraction of about 2%.
"Japan's economy is expected to remain weak for the time being," said Japanese Economics Minister Kaoru Yosano on Thursday.
However, Mr Yosano said thatsupply constraints were easing and reconstruction demand was likely to spur growth.
"The economy has the strength to bounce back," Mr Yosano said.
Pessimistic consumers
Naomi Fink, Japan Strategist atJefferies, said the most worrying part of the latest data was the decline in private consumption of 0.6%, as people cut their spending after the earthquake.
Private consumption accounts for almost60% of the Japanese economy.

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Roland Buerk reports from Tokyo on Japan's attempts to deal with power loss caused by the earthquake
"It was already soft in the final quarter of 2010,"said Ms Fink.
The earthquake, however, has further dampened sentiment. The consumer confidence index fell to 33.1 in April, according to the Cabinet Office, where a reading below 50 suggestsconsumer pessimism. "Judging by the drop in retail sales and household expenditures over March, consumption should be one of the greater contributors to negative growth in the first quarter," said Ms Fink....
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