The sales tax rise from 5% to 8% contributed to a surge in purchases in the first quarter and annualised GDP growth of 6.1%, leading to a corresponding drop in the second quarter.

The 6.8% fall was actually better than expected – consensus estimates were for a 7% fall.

The decline is the worst since the first quarter of 2011, when a tsunami devastated Japan’s economy.

However, the government was more positive, pointing to a pick-up in sales in a number of industries.

“Looking at monthly data during April-June, sales of electronics goods and those at department stores are picking up after falling sharply in April,” finance minister Akira Amari said in a press conference.

“The job market is also improving steadily. Taking these into account, Japan’s economy continues to recover moderately as a trend and the effect of the sales tax hike is subsiding.”