Japan’s economy sank deeper into its worst postwar contraction in the second quarter as the coronavirus jolted businesses more than initially thought, underscoring the daunting task the new Prime Minister faces in averting a steeper recession.

Other data put that challenge in perspective, with household spending and wages falling in July as the impact of the pandemic kept consumption frail even after lockdown measures were lifted by the government in May.

The world’s third-largest economy shrank an annualised 28.1 per cent rate in April-June, more than a preliminary reading of a 27.8 per cent contraction, revised gross domestic product (GDP) data showed on Tuesday, suffering its worst postwar contraction.

The data will put the new prime minister, to be elected in a ruling party leadership race on September 14, under pressure to take bolder economic support measures.

Chief cabinet secretary Yoshihide Suga, the frontrunner to become next premier, has signalled his readiness to boost spending if he were to lead the country.