CONTRACTION

Japan Economy Shrinks More Than Expected

But Nikkei soars more than 7%.

Japan’s economy shrank in the last quarter of 2015, underscoring concerns over the government’s economic reform policy. Between October and December, the world’s third-largest economy contracted by 0.4 percent compared with the previous quarter, according to preliminary data. Expectations for the numbers were for a quarterly contraction of 0.3 percent. The economy contracted on an annual pace of 1.4 percent during that same period compared with expectations for an annualized contraction of 1.2 percent. The contraction is Japan’s second one in 2015, raising concerns that Prime Minister Shinzo Abe’s plan to revive the economy is not working. However, investors appeared to shrug off the growth numbers on Monday with the Nikkei 225 surging more than 7 percent.