Japan's economy shrinks for 2nd straight quarter

By the Associated Press | May 18, 2011 | 8:29 PM EDT

TOKYO (AP) — Japan's government says the economy shrank at an annualized rate of 3.7 percent in the first quarter.

The result marks the second straight quarter of contraction and includes the initial impact of the massive earthquake and tsunami that hit Japan in March.

The earthquake and tsunami devastated Japan's northeast coast, wiping out entire towns in the hardest-hit areas, and caused a major crisis at a nuclear power plant. The disaster also disrupted manufacturing supply chains in northeast Japan and forced factories to cut output.

On a quarterly basis, Japan's real gross domestic product in January-March fell 0.9 percent from the previous three-month period, according to the Cabinet Office's report Thursday.