Japan falls into recession

Japan, the world's third-largest economy, has sunk back into recession, after reporting growth for three consecutive quarters up to March 2012, according to revised data released by the country's cabinet office Monday.

It was earlier reported that the Japanese economy shrank 0.9 per cent in the September quarter, which on an annualised basis, is around 3.5 per cent.

Although the revised government data has not changed the preliminary estimate for the third quarter, it has marginally reduced the growth figure for the second quarter, which indicates a small contraction of 0.03-per cent, an annualised 0.1-per cent decline in place of a 0.1-per cent expansion or 0.3-per cent growth on annual basis reported earlier.

As two consecutive quarters of contraction indicates a technical recession, the economy has already entered into a downturn. Moreover, based on preliminary indications, analysts expect that the contraction will continue in the December quarter as well.

Corporate capital spending has been revised to a less severe 3-per cent drop in the second quarter from 3.2 per cent decline reported earlier, and private consumption, which accounts for about 60 per cent of GDP, was raised to a 0.4-per cent drop from a 0.5-per cent fall earlier.

Conversely, exports in the second quarter were revised to a 5.1-per cent fall from the earlier reported 5 per cent and public investment was downgraded to a 1.5-per cent rise compared with the previous 4-per cent increase.