The Japanese economy has shrunk some 1.8 per cent in the period April to June.
The unexpected result has raised eyebrows about the government’s economic policy.
The contraction is the worst since the country was hit by the twin earthquake/tsunami strike in 2011.
The fall is blamed on the consumer sales tax introduced in April, another rise is scheduled for 2015.
The government is under pressure to halt next year’s planned hike and the central bank is being called upon to expand its stimulus programme.