Japanese economy shrinks 3.8% in Q1

The Japanese economy shrank at a staggering rate of 3.8 per cent in the first quarter of 2009, but the pace of contraction is still less than anticipated.

On an yearly-basis, the country's GDP declined 14.2 per cent, the latest data from the Japanese Cabinet Office showed.

Mired in recession, the world's second largest economy was projected to contract at four per cent in the first three months of this year. That forecast translated into a shrinkage of 15.2 per cent on an year-on-year basis.

The latest reading provide a bit of hope for the export-oriented economy reeling under the financial turmoil.

Majority of the leading economies have fallen into recession -- broadly defined as two consecutive quarters of negative growth -- in the wake of the financial crisis, which began with the US subprime crisis.

In recent months, Japan has witnessed a steep decline in exports, which has in turn crimped corporate profits. Moreover, many Japanese corporates have resorted to massive layoffs as they explore ways to cut down on costs.

On the other hand, the GDP of eurozone -- grouping of 16 nations which share the common currency euro -- fell 4.8 per cent in the first quarter of 2009.