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Japan's economy -- that shrinking feeling

Abe must launch reforms after output drop, but will struggle to go ahead

| Japan
Japan's Prime Minister Shinzo Abe still needs to push structural reforms despite his dwindling political capital.   © Reuters

Japan hit a snag with the 0.6% economic contraction in the first quarter. The question is whether it is just a hiccup or a troubling end to the best run of growth since the 1980s.

Most pundits say it is a blip. Asia's second-biggest economy, they argue, is on a roll amid heady global growth and buoyant corporate profits. But Prime Minister Shinzo Abe's team should not downplay the risk that this slowdown is for real.

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