A DISAPPOINTING reading on Japan's economy, which suddenly seems to be faltering after two years of steady growth, raises the possibility that it is peaking just as trade friction with the United States escalates.

Economists believe that Japan  will avert a recession -two quarters of contractions- as they see the  first-quarter slump as a soft patch caused by temporary factors like bad weather and weak stock markets.

But looming uncertainties suggest that Prime Minister Shinzo Abe's programme to reflate the economy, known as ''Abenomics,'' is losing momentum and could force policymakers to ponder additional measures to keep the recovery going.

''If signs of recession emerge, they would derail Japan's path to beat deflation and show Abenomics  failed,'' said Abushi Takeda, chief economist at Itochu Economic Research Institute. 

The government could compile a spending package worth up to 3 trillion yen {20.37 billion pounds} that includes tax breaks for cars and home appliances, if recession risks heighten, he said.

Left with little ammunition to jump-start  growth, the Bank of Japan will hold off on ramping up stimulus but maintain its ultra-easy policy despite the rising cost of prolonged easing, analysts say.

The government confirmed one last Friday that the economy shrank 0.6 percent at an annual pace in the first quarter, worse than the 0.4 percent upward revision in GDP expected by analysts.

The revised data showed that while capital spending rose, consumer spending came in slightly weaker than the preliminary reading.

The Honor and serving of the latest  Global Operational Research on Advance economies continues to part 2.


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