Japan's economy shrank less than its initial value last quarter, and a new round of restrictions to curb the epidemic is likely to prolong the economic downturn.

Gross domestic product shrank at an annualised rate of 3.9 per cent from the fourth quarter of 2020, less than the 5.1 per cent contraction the government had expected, according to data released by the cabinet office on Tuesday. Economists had expected a contraction of 5%.

Another report showed that wages rose at their fastest pace since the end of 2018 in April from a year earlier.

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