Japanese shares declined Thursday after a government report showed the nation's economy shrank more than forecast for the January-to-March quarter, as dpa reported. The benchmark Nikkei 225 Stock Average lost 41.26 points, or 0.43 per cent, to close at 9,620.82. The broader-based Topix index was down 6.07 points, or 0.72 per cent, at 831.89. Tokyo stocks opened higher following an overnight rally on Wall Street. But the news of the contraction started to weigh on investor sentiment through the morning. Both the Nikkei and the Topix declined further in the afternoon after Chief Cabinet Secretary Yukio Edano said the country should start to discuss soon a separation between generating electricity and transmitting it. Shares in utilities, which want to protect their regional monopolies, plunged. Japan's economy shrank at an annualized pace of 3.7 per cent in the period, its second consecutive quarter of contraction, the government said. The economy was hit by the March 11 earthquake, tsunami and ensuing crisis at a damaged nuclear power plant, causing production disruptions and a fall in consumer spending. The figure was worse than the annualized 2.3-per-cent contraction forecast by economists in a survey by the Kyodo News agency. On currency markets at 3 pm (0600 GMT), the dollar traded at 81.67-69 yen, up from Wednesday's 5 pm quote of 81.01-02 yen. The euro traded at 1.4259-4263 dollars, little changed from 1.4255-4256 dollars Wednesday, and at 116.46-49 yen, up from 115.48-52 yen.
