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Weak Japan economy puts pressure on policymakers

TOKYO--Japan's economy slowed markedly last month as consumer spending dropped and factory output ran out of steam, data showed Friday, underscoring concerns about the state of the country's recovery.

The weak figures come after Japan suffered its biggest quarterly contraction since the 2011 quake-tsunami disaster, as an April sales tax rise slammed the brakes on growth in the world's number three economy.

While deflation remained at bay, consumer price growth stalled in July, and the fresh figures were sure to heap pressure on the Bank of Japan to usher in another round of monetary easing to kick-start growth, analysts said.

The recent data will also force Japanese Prime Minister Shinzo Abe's administration to take a hard look at whether to raise sales taxes again, after the April 1 hike — seen as crucial to shrinking Japan's mammoth debt — dented growth.

Abe launched a high-profile growth blitz last year, dubbed Abenomics, in a bid to kick-start an economy beset by years of deflation and slack growth.

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 Japan economy stalls as incomes, spending languish 
Pedestrians wait to cross a street at Shibuya shopping district in Tokyo on Friday, Aug. 29. Japan's vital signs remained weak in July as wages fell further and household spending dropped, signaling continued weakness in the world's third-largest economy.

(AP

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