A think tank affiliated with Daiwa Bank has revised its estimate of the growth in Japan's gross domestic product in fiscal 2001, which began in April, to 0.2 percent from its March prediction of 0.9 percent. Daiwa Research Institute Inc. blamed the downward revision mainly on a slowdown in both exports and capital spending in information technology-related fields as a result of the sluggish U.S. economy.

The world's second-largest economy contracted a real 0.2 percent in the first quarter of 2001 from the previous quarter due largely to weak exports induced by the slowing U.S. economy and decelerating corporate investment.

The data for the last quarter of fiscal 2000 put the pace of growth in GDP at 0.9 percent for the fiscal year, falling short of the government's target of 1.2 percent.

Personal consumption, which accounts for about 60 percent of the total value of goods and services produced domestically, will reduce its growth to a negligible gain of 0.1 percent from the March estimate of 0.4 percent because of lagging improvements in income and employment, according to the institute.

Private-sector capital spending, another pillar of the economy, was also revised down to growth of 0.9 percent from the previous estimate of 4.6 percent, it said.

An economist at the institute, however, said, "The Japanese economy will show signs of recovery around this fall as the Bank of Japan's current ultra-easy credit policy is expected to have an explicitly positive impact on the domestic economy."