Japan\'s economy shrank by more than previously thought in the April-June quarter, with corporate capital spending suffering a worse impact from the March 11 earthquake and tsunami than first expected. Japan\'s revised gross domestic product shrank at an annualised 2.1 percent in the quarter, the Cabinet Office said, as firms were forced to put off spending plans following the disasters. A strong yen and a downturn in overseas export markets has also clouded the outlook for Japan\'s fragile recovery, say analysts. For the third straight quarter the economy contracted, shrinking by a revised 0.5 percent on-quarter compared to an initial reading of a 0.3 percent drop.The sharp downward revision came within market expectations and was more severe than last month\'s preliminary reading of an annualised 1.3 percent shrinkage.The disasters six months ago left 20,000 people dead or missing, devastated large areas of the northeast and sparked a nuclear crisis at the Fukushima nuclear plant, which continues to leak radiation into the environment. The damage and devastation brought by the tsunami also shattered crucial component supply chains, forcing companies to shut down factories, slowing the nation\'s output and exports as the economy tipped into recession.While Japan\'s producers have raced to restore output more quickly than expected, there are concerns that effort could be undermined by a strong yen that erodes repatriated profits, as demand wanes amid a global economic slowdown.