Japan forecasts 3.3% contraction

TOKYO: Japan’s government yesterday slashed its economic forecasts, saying gross domestic product would shrink 3.3% over the next year, and a senior ruling party official said further stimulus would be needed.

The cabinet formally approved a record 15.4 trillion yen (US$159bil) stimulus plan, largely funded by new bonds – with market players warning sliding tax revenue and more stimulus spending would mean even more bond issuance.