Japan's economy, hurt by a devastating earthquake and tsunami, shrank at a 2.1 percent annual rate in the second quarter, worse than estimated earlier.
The gross domestic product for the world's third largest economy was revised downward from the earlier estimate of 1.3 percent because of weak corporate capital spending in the aftermath of the March 11 quake-tsunami disaster, the government said Friday.
The revision was close to market forecasts based on deteriorating business sentiment amid slower production and exports, Kyodo News reported.
The latest figures mark the third straight quarterly decline in the GDP, but analysts told Kyodo the economy could rebound strongly in the coming quarters with reconstruction work speeding up.
The Wall Street Journal reported a government survey of 40 economists showed the annual GDP is expected to expand by 4.95 percent in the July-September quarter and 2.63 percent in the fourth quarter.
Others pointed to the strong yen and weakening overseas demand as downside risks.