apan, the world's third largest economy, contracted sharply in the first three months of the year, after a tsunami and earthquake caused devastation in March.
Gross domestic product (GDP) shrank 0.9% in the first quarter, the Cabinet office said. That meant the annualised rate of contraction is 3.7%.
Japan is now in recession, after two consecutive quarters of decline.
Analysts say consumption and exports were worst hit.
The contraction was bigger than expected with most forecasts of the annualised rate at around 2%.
"Japan's economy is expected to remain weak for the time being," said Japanese Economics Minister Kaoru Yosano on Thursday.
However, Mr Yosano said that supply constraints are easing and reconstruction demand will likely spur growth.
"The economy has the strength to bounce back," Mr Yosano said.
Pessimistic consumers
Naomi Fink of Japan strategies says the most worrying part of today's data was the decline in private consumotion of 0.6%, as people cut their spending after the quake.
Private consumption accounts for almost 60% of the Japanese economy.
Roland Buerk reports from Tokyo on Japan's attempts to deal with power loss caused by the earthquake
"It was already soft in the final quarter of 2010," said Naomi Fink, Japan Strategist at Jefferies.
The earthquake, however, has further dampened sentiment.
The consumer confidence index fell to 33.1 in April, according to the Cabinet Office.
A reading below 50 suggests consumer pessimism.
"Judging by the drop in retail sales and household expenditures over March, consumption should be one of the greater contributors to negative growth in the first quarter," said Ms Fink.
