Japan's economy shrinks annualized 7.1 pct in Q2

Japanese government said Monday that Japan's economy, the world's third largest, shrank an annualized 7.1 percent in inflation-adjusted terms in the second quarter of 2014, the biggest drop in over five years.

The read was downgraded from the preliminary reported released last month which said the country's economy fell an annualized real 6.8 percent in the reporting quarter.

The Japanese Cabinet Office said Monday that the April-June contraction in real gross domestic product, the total value of goods and services produced at home, corresponded to a 1.8 percent decrease from the previous quarter.

Local reports doubted that the data may suggest that impacts of the sales tax hike in April has continued than expected and it would affect decision by Prime Minister Shinzo Abe on whether or not to further move up the sales tax by 2 percentage points to 10 percent in 2015.