Asian Economy: Overview, Growth and Development- Japan's worst postwar economic downturn could force new leader to boost stimulus.

Japan's economy sank deeper into its worst postwar contraction in the second quarter as the coronavirus jolted businesses more than initially thought, underscoring the daunting task the new prime minister faces in averting a steeper recession.

Other data put that challenge in perspective, with household spending and wages falling in July as the impact of the pandemic kept consumption frail even after lockdown measures were lifted in May.

The world's third-largest economy shrank an annualised 28.1percent in April-June, more than a preliminary reading of a 27.8percent contraction, revised gross domestic product (GDP) data showed on Tuesday, suffering its worst postwar contraction.

The data will put the new prime minister, to be elected in a ruling party leadership race on Sept. 14, under pressure to take bolder economic support measures.

Chief Cabinet Secretary Yoshihide Suga, the frontrunner to become next premier, has signalled his readiness to boost spending if he were to lead the country.

"The risk ahead is that the effect of measures taken so far, such as pay-outs to households, will peter out," said Koichi Fujishiro, an economist at Dai-ichi Life Research Institute.

If COVID-19 weighs heavily on wages, the new administration could take additional steps to help households.

The government has so far unveiled a $2 trillion package of stimulus measures, adding to an enhanced easing programme from the Bank of Japan (BOJ).

Japan recently saw a renewed rise in infections but has been spared the kind of...

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