Japan back in recession as export economy suffers losses

Japan joined Italy on the economic sick-list yesterday, as official figures tipped the country back into recession.

Output shrank by 0.9 per cent between July and September, but revisions to previous data also showed a slight decline between April and June. The latest figures leave Japan and Italy alone among the world's eight-biggest economies presently in recession.

Experts fear Japan's plight will get even worse between October and December as the export-reliant economy suffers from its diplomatic row with China over disputed islands.

The country's biggest firms, such as car-making giant Toyota, have been hard hit by the row, putting pressure on the Bank of Japan to pump more stimulus into the economy.

"There is still a good chance that Japan's economy will suffer another contraction," said Takeshi Minami, chief economist at the Norinchukin Research Institute in Tokyo.