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Japan's economy has entered its first recession since 2001 on Monday as the world's second-largest economy shrank in the third quarter.
Gross domestic product fell an annualized 0.4 percent in the July-September period, the Cabinet Office said today in Tokyo. GDP fell an annualized 3.7 percent in the second quarter. That means Japan, along with the 15-nation euro-zone, is now technically in a recession, which is commonly defined as two straight quarters of contraction.
"The downtrend in the economy will continue for the time being as global growth slows," said Japanese Economy Minister Kaoru Yosano.
The Eurozone officially slipped into recession last week, so has the UK and the US is expected to follow.
"We need to bear in mind that economic conditions could worsen further as the US and European financial crisis deepens, worries of economic downturn heighten and stock and foreign exchange markets make big swings," Mr Yosano added.
Japanese carmaker, Toyota (NYSE:TM) forecast its profit to fall this fiscal year by almost 70 percent. The company, which makes more than three-quarters of its sales abroad, said it will cut 3,000 workers by March 2009.
Toyota ADR shares were recently up 34 cents at $64.02 on the New York Stock Exchange.
The yen fell to 97.49 per dollar as of 12:57 p.m. in Tokyo from 96.09 before the report. Japan's currency has gained 8.9 percent since the end of September.
Quarter-on-quarter, Japan's economy shrank 0.1 percent, according to today's government report. Capital spending fell 1.7 percent from the previous three months, compared with economists' expectations of a 2 percent drop.
The Organization for Economic Cooperation and Development forecasts Japan's GDP will fall by 0.1% next year, compared to 0.9 percent in the U.S. and 0.5 percent in the euro zone.
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