Japan39;s Q1 GDP falls faster than expected
Consumption, capex both fall more than expected
Thrifty consumers, geopolitical factors among risks to outlook
Data creates doubts about timing of BOJ rate hikes analysts

TOKYO, May 16 Reuters Japan39;s economy fell faster than expected in the first quarter as the weak yen continued to batter consumers, throwing a fresh challenge to the central bank39;s push to get interest rates further away from near zero.

Preliminary gross domestic product GDP data from the Cabinet Office on Thursday showed Japan39;s economy shrank 2.0 annualised in JanuaryMarch from the prior quarter, faster than the 1.5 drop seen in a Reuters poll of economists.

Downwardly revised data showed GDP barely grew in the fourth quarter of 2023, due to downgrades to capital expenditure estimates.

While preliminary capital spending data is often subject to heavy revisions in the final release, the acrosstheboard declines in all GDP components suggest Japan39;s economy had no major growth engine in the first quarter.

That could create some hesitation for the Bank of Japan, which raised interest rates in March for the first time since 2007 and has since signalled its intention to continue tightening policy.

It would be possible that the timing of rate hikes could be pushed back depending on how the GDP may rebound in the current quarter, said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities.

He said while the economy would certainly…