Japanese economy shrinks again

15 February 2013

The Japanese economy contracted for the third quarter in a row during the final three-month period of last year.

Statistics published by the nation's economy showed that the world's third-largest economy experienced a marginal decline of 0.1 per cent in the period between October and December when compared to the previous three-month timeframe.

This downward movement confounded the expectation among many analysts for a tentative return to growth and shows that policymakers in Tokyo still have work to do in order to stimulate expansion, despite their recent efforts.

Declines in key industrial areas such as exports and weak domestic demand were blamed for causing this fall by Japanese officials and Shuji Tonouchi of Mitsubishi UFJ Morgan Stanley Securities told BBC News he agrees with this sentiment.

"The biggest reason for the decline in GDP is external demand was weak and domestic demand did not recover as quickly as we thought," he noted.

By Tony Aynsley

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