Japan's economy posted its sharpest contraction in nearly seven years last quarter, the government said Friday, raising calls for companies to hike workers' wages to help offset a looming recession.
The world's second largest economy shrank at an annualised 3.0 percent in the three months through June, worse than the 2.4 percent previously thought, as both domestic demand and exports faltered and raw material prices soared.
Compared with the previous quarter, the economy shrank by 0.7 percent. A first reading made last month had put that figure at 0.6 percent, the Cabinet Office said.
It was the first contraction in one year and the sharpest since an annual 4.5 percent fall in the quarter through September 2001. But it was less than analysts had expected and had little impact on the stock market or the yen.
Kaoru Yosano, the economy and fiscal policy minister, urged corporate Japan needed to prop up wages to stimulate spending at home as a global downturn slows demand for exports -- long Japan's key driver of economic growth.