Mon 17 Nov 2008
LONDON (SHARECAST) - Japan has fallen into recession after shrinking 0.1% during the third quarter and 0.9% during the previous three months.

The world’s second largest economy has been hit hard by tumbling sales of cars and consumer electronics in America and Europe.

Economy Minister Kaoru Yosano warned: "The downtrend in the economy will continue for the time being as global growth slows.”

"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,” he added.

A 0.4% annualised drop in Japan’s gross domestic product during the three months to September has pushed it into its first recession since 2001.

Official figures confirmed last week that Europe's economy is in its first ever technical recession following two consecutive quarters of negative growth.

The 15 countries using the euro shrank 0.2% in the three month ended September, having also contracted 0.2% in the previous quarter. It is the first recession in the euro zone since its formation in 1999.