Source: FT.com

The Japanese economy entered its first recession in seven years, as growth declined for the second quarter running by a wider margin than expected, raising fears the situation could deteriorate amid the global downturn.

Gross domestic product shrank an annualised 0.4 per cent in the three months to the end of September, following a revised decline of an annualised 3.7 per cent in the second quarter, the cabinet office said on Monday.

“The GDP data show that the Japanese economy is in recession,” said Kaoru Yosano, economy minister.

Data published last week showed Europe entered a recession last quarter.

The deteriorating economic environment forced the government of prime minister Taro Aso to unveil a Y5,000bn ($51.5bn) stimulus package last month and the Bank of Japan to slash interest rates for the first time in seven years – by 20 basis points to 0.3 per cent.

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