Japan's economy contracted less than estimated in the Q1

Japan's economy contracted less than initially estimated in the January-March quarter, government data showed on Monday, with consumption figures revised upwards at a time when uncertainty surrounding US tariffs is clouding the outlook.

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Gross domestic product (GDP) shrank an annualised 0.2 per cent in the three months through March 31, showed revised data from the Cabinet Office, rather than 0.7 per cent announced on May 16 which matched economists’ median forecast.

Versus the previous quarter, the revision translates as flat in price-adjusted terms compared with an initially estimated 0.2 per cent contraction.

The revision does little to allay analyst concern that economic growth was losing momentum even before US President Donald Trump implemented his so-called reciprocal tariffs on April 2.

“It wasn't a revision that changed our view on the overall economy,” said economist Uichiro Nozaki at Nomura Securities.

Private consumption, which accounts for more than half of Japan’s economy, grew 0.1 per cent, versus flat in the initial reading. Contributing to the revision was the inclusion of restaurant and games sales data which has since become available.

The capital expenditure component of GDP, a barometer of private demand-led strength, expanded 1.1 per cent in the first quarter, revised from 1.4 per cent. Economists had estimated 1.3 per cent.

An upward revision in private inventory contributed to reducing the degree of contraction in the overall figure, the government said.