Japan's economy contracted an annualized 2.1 percent in the second quarter, on an inflation-adjusted basis, the Cabinet office said in a revised report Friday.

The 2.1 percent contraction equates to a 0.5 percent fall in real gross domestic product from the previous quarter and this compares to the government's initial 0.3 percent fall reported by the Cabinet office in the previous month .

According to the latest government data, the initial annualized 1.3 percent fall was downwardly revised due to falling capital investment, particularly for firms unrelated to financial industries, the data showed.

Capital spending fell a revised 0.9 percent, compared with a preliminary reading of a 0.2 percent increase, the Cabinet office said. This compares with economists' forecast of a 1.9 percent decline.

Capital investment, according to leading economists, will improve in the following quarter and combined wit the positive contribution of private-sector inventory will see an upswing in economic growth.

The data due out in mid-November is also likely to show a rebound in industrial production, according to median economists' forecasts.

VietNamNet/Xinhuanet