Japan`s economy contracts in fourth quarter

Japan`s economy contracted in the final three months of 2015, adding to a string of setbacks for the government`s economic reform policy.

Between October and December, it shrank by 0.4% compared with the previous quarter, official figures show.

Expectations for the numbers were for a quarterly contraction of 0.3%.

Weaker domestic demand, together with slower investment in housing, contributed to the disappointing numbers.

On an annualized basis, the economy contracted 1.4% during the period. That compares with expectations for an annualized contraction of 1.2%.

Prime Minister Shinzo Abe`s plan to revive the economy - dubbed Abenomics - was introduced after his December 2013 elections win.

The aim has been to combat deflation, which Japan has struggled with for nearly two decades, as well as boost demand and investment.

But the the world`s third-biggest economy has been facing problems.

In the three months to September, according to revised numbers, it avoided a technical recession.

But it has been in recession four times since the global financial crisis.

However, analysts said Monday`s numbers should be viewed in context and that the outlook wasn`t all bad.

"A single negative growth number should not be over-interpreted because the economy remains in rather good shape and continues to get strong policy support," said economist Martin Schulz.

"The outlook has certainly deteriorated, however, along with global trends. Growth forecasts will almost certainly be down-adjusted again, and the pressure on the government to come forward with more tangible growth-oriented reforms will increase."

There has been a lot of hyperbole surrounding the Abenomics project. The Bank of Japan`s vast money printing project has been described as a "money-spewing bazooka".