The Japanese economy contracted 0.5 percent on an annualized basis in Q1 of 2022, compared with a preliminary data of a 1.0 percent decline and following an upwardly revised 4.0 percent growth in Q4 which was the strongest pace of expansion since Q4 of 2020. The upward revision came as consumption stayed resilient despite a resurgence of COVID-19 infections, with household consumption continuing to grow while there was a rebound in government spending. Meantime, business investment fell following a rise in the prior period, reflecting supply chain disruptions due to the Ukraine war. Net exports also contributed negatively to the GDP, amid a sharp jump in imports following the weak yen and surging commodity prices.
