Japan’s economy shrank in the September quarter for the first time since last year, adding to signs that slowing global growth and tensions with China are nudging the world’s third-largest economy into recession.
The 0.9 percent fall in GDP was in line with expectations, although a decline in capital expenditure was much steeper than forecast. Sony Corp and Panasonic Corp have slashed spending plans to cope with massive losses as they struggle with competitive markets and a strong yen.
The fall in GDP translated into an annualized rate of decline of 3.5 percent, government data showed on Monday. While U.S. growth showed a modest pick up in the third quarter, Japan and the euro zone economies are shrinking.
“The GDP data confirms that the economy has fallen into a recession,” said Tatsushi Shikano, senior economist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo. “It is set for a second straight quarter of contraction in the current quarter.”
A recession is commonly defined as two consecutive quarters of contraction…
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via Japan economy shrinks, recesssion looms | Reuters.
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