Japan's economy contracted sharply in the second quarter.

Japan's economy contracted sharply in the second quarter after a national sales tax in April rose 3% and triggered a sharp decline in consumer spending. Real GDP shrank 6.8% in the three months through June on an annualized basis from the prior quarter. Prime Minister Shinzo Abe will have to address the tax issue again soon. A sales tax increase (which will raise the rate to 10%) has been approved by the Japanese government and will take effect in October 2015.