1st LD Writethru: Japan's economy stalls in April-June quarter

Japan's economy essentially stalled in the April-June quarter, expanding an annualized 0.2 percent in real terms with the figure coming in below economists' expectations, the government said on Monday.

According to the Cabinet Office, the second quarter growth of the world's third-largest economy came in less than market expectations for between a 0.4 and a 0.7 percent expansion in the recording period.

The government pointed to a slowdown in overseas economies, the strength of the yen and slumping private consumption as all contributing to the stagnation.

Sluggish exports have been weighing on the economy, the latest economic data showed, with exports falling 1.5 percent in the quarter, following a 0.1 percent growth in the previous quarter, underscoring withdrawing overseas demand and the negative impact of the yen's protracted appreciation.

With consumer spending also weighing on the economy, with an uptick of just 0.2 percent in second quarter, a hefty component accounting for 60 percent of total gross domestic product, the failure of "Abenomics" is very much in the spotlight, with the weaker-than-expected growth data causing economists to question his policies' effects on deflation, as market participation has dropped and consumer spending slumped.

Analysts also highlighted the fact that increased corporate profits have not been converted into expenditure, with capital expenditures slipping 0.4 percent in the quarter, as businesses here perceive the domestic market as being weak and are reluctant to increase spending or investments. Enditem