Japan has fallen into its fourth recession in the last ten years.
Government figures show that in the three months to September the Japanese economy contracted 0.5% from the second quarter (2.2% year-on-year), following a 1.2% decline in Q2. Two consecutive quarters of contraction are the accepted definition of a recession.
As far as analysts are concerned, the outlook remains bleak for Japan, with Merrill Lynch predicting a further four quarters of contraction.
Despite a surprise 1.1% rise in Q3’s corporate capital investment, personal consumption shrank 1.7%. In addition, exports, previously an essential factor in tuning the economy around, are tumbling and corporate earnings are down due to falls in prices.
News source: Wall Street Journal