Japan's economy contracts in April-June quarter

TOKYO — Japan's economy contracted at a 1.6 percent annual pace in the April-June quarter, as bad weather and slowing demand in China posed further setbacks for the "Abenomics" growth strategy.

The gloomy preliminary growth data reported Monday was in line with expectations, and raises the likelihood the central bank may opt for fresh stimulus measures in coming months, Masamichi Adachi of JPMorgan said in a research note.

Slower-than-expected consumer demand, exports and corporate investment have stunted growth after the economy expanded at a relatively robust annual pace of 3.9 percent in January-March.

The contraction in April-June represented a 0.4 percent decrease from the previous quarter.

Prime Minister Shinzo Abe has championed a strategy of massive monetary easing that is pumping trillions of yen (hundreds of billions of dollars) into the economy. But stagnant wage growth and corporate investment have so far slowed progress toward a strong, sustained cycle of growth.