Earthquake devastation hurls Japan back into recession

Gross domestic product (GDP) shrank 0.9% in the first quarter, the Cabinet office said. That meant the annualised rate of contraction is 3.7%.

Japan is now in recession, after two consecutive quarters of decline, were consumption an exports appear to be the worst hit.

The contraction was bigger than expected with most forecasts of the annualised rate at around 2%, the BBC reports.

"Japan's economy is expected to remain weak for the time being," said Japanese Economics Minister Kaoru Yosano.

However, Yosano said that supply constraints are easing and reconstruction demand will likely spur growth.

"The economy has the strength to bounce back," he said.

Naomi Fink of Japan strategies says the most worrying part of today's data was the decline in private consumption of 0.6%, as people cut their spending after the quake.

Private consumption accounts for almost 60% of the Japanese economy.

The consumer confidence index fell to 33.1 in April, according to the Cabinet Office.

A reading below 50 suggests consumer pessimism.

"Judging by the drop in retail sales and household expenditures over March, consumption should be one of the greater contributors to negative growth in the first quarter," said Fink.