Japan still logged its worst performance in almost 35 years due to fall in exports.
Asia's biggest economy shrank by 3.2 per cent in the three months to December from the previous quarter.
Exports were down 13.8 pc on the quarter, business investment fell 5.4pc and private consumption eased 0.4pc.
The figure was better than a first estimate of a 3.3 per cent contraction, for an annualised drop of 12.7 per cent.
But even after the revision, it was the worst quarter since early 1974 in the wake of the first oil shock, a government official said.
The economy contracted for a third straight quarter as the global downturn choked demand for the country's cars and high-tech goods.
Japan was once seen as relatively immune to the financial crisis, but its economy is now shrinking much faster than many other major economies including the United States.