Despite the measures taken by the world powers to shield the global economy from months of turmoil on financial markets, Japan now officially joined Germany and Italy on the list of major economies that are in recession. According to figures from the Cabinet Office Japanese economy unexpectedly contracted by 0.1 per cent in the three months to September, after shrinking 0.9 per cent in the second quarter of the year.
It is the first time since the third quarter of 2001 that Japan has entered a recession, which is usually defined as two or more consecutive quarters of negative economic growth. Gross Domestic Product (GDP) contracted at an annualised rate of 0.4 per cent.
In the third quarter the business investments slumped by 1.7 pc, while exports were worse than expected as the financial meltdown triggered by a US housing slump squeezed other major world economies. Barclays Capital's Chief Japan Economist, Kyohei Morita said, "Japan was dragged down by the weakness in the global economy."