Japan has entered into a recession, according to revised economic data released today, the Guardian reported. Government officials said the Japanese economy shrank by 0.03 percent in the second quarter of 2012 – more than previously estimated – and then contracted by 0.9 percent in the third quarter.
Japan’s economy has faltered due to a slowdown in exports prompted by the eurozone crisis and a diplomatic spat with China, the Guardian reported. A strong yen has also slowed exports.
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“It shows how vulnerable Japan is to external demand conditions in Europe and Asia,” Tomo Kinoshita, chief economist at Nomura in Tokyo, told the Financial Times.
Experts expect the recession to linger as exports continue to be weak and domestic demand is stagnating with a tight labor market, the Financial Times reported.
In November, Prime Minister Yoshihiko Noda’s government approved a $10.7 billion spending package to stimulate the economy, but he and his Democratic party face a tough battle to hold onto power in elections scheduled for Dec. 16, the Guardian reported.
According to the Guardian:
Japan's main opposition party has promised to spend heavily on public works and push the Bank of Japan to launch measures to boost growth if it wins.
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