Japan's economy shrinks less than expected in first quarter, central bank expected to keep rates unchanged

Japan's economy contracted less than initially estimated in the first quarter, with inventories contributing slightly more to growth than preliminary data, according to Jinshi. Japan's first-quarter GDP private consumption quarter-on-quarter rate remained unchanged at -0.7%, marking the fourth quarter of decline, while corporate spending data was revised to -0.4% from an initial decline of 0.7%.

Inventories contributed 0.3 percentage points to economic growth, while net exports were adjusted to reflect a slight drag on the economy. The report confirmed that household and corporate spending remains weak, a concern for the Japanese government and the Bank of Japan.

Japanese authorities are looking for signs that demand can withstand continued inflation. Economists expect the central bank to keep its benchmark policy rate unchanged at a two-day meeting that ends on Friday, with many expecting a rate hike in October.