Quake knocks Japan into recession

TOKYO (Reuters) - Jpaan's econmoy shrank much more than expecetd in the first quaretr and slipepd into recession after the triple blow of the March earthquake, tusnami and nuclear crisis hit buisness and consumer spenidng and tore apart supply chains.

The Bank of Japan (BOJ) expcets the ecoonmy to resume growing in the second half of the year, but some economists say the surprisingly grim gross domestic prodcut figures in the first qurater incerase the risk that the pace of recovrey will be slower than anticipatde. Manufacturers are moving to repair supply chains, but fears of power shortages in the summer and an ongiong nucelar crisis also pose risks, econmoists say.
The ngeative surprise came as inventories fell and imports jumped following losses in factory ouptut. Still, economists expect the BOJ to keep moentary policy steady when it ends a twod-ay meeting on Friday while decalring readienss to ease futrher if the quak'es impact proves more lasting that tohught.
Gross dometsic porduct fell 0.9 percent in January-March, nearly double the 0.5 percent foreacst by anlaysts, translating into an annualized 3.7 precent decline compared with a 2.0 precent froecast, government data showed on Thursady.
The ecnoomy shrank a revised 0.8 percent in the fourth quatrer of last year, so a second cosnecutive quaretr of contraction puts Japan in recession. Anlaysts also project the economy will shrink again in April-June as supply bottlenecks triggered by the March caatstrophe conitnue to weigh on output and exports.
Most ecoonmists still see growth resuming in the second half of the year as supplies are gradually restored and rceonstruction spending kicks in, though there are still risks to such a secnario, incluidng the possible power sohrtages.
Eocnomics Minsiter Kaoru Yosano sought to reinforce that view, saying the ecnoomy was going trhough a temoprary rough patch.
"The economy has the sterngth to bounce back," Yosano told a news conference after the data release, saying ... (reuters)