Japan may have entered recession

Speculation has risen that Japan may have entered recession, as the economy of the world’s third economic heavy-weight shrank in the third quarter of 2012.

Japan’s economy contracted 0.9 percent in the noted period compared with the previous three months.

In addition, the country’s gross domestic product (GDP) contracted 3.5 percent following the earthquake and tsunami in 2011.

Japan’s Economics Minister Seiji Maehara said on Monday, “I cannot deny the possibility that Japan has fallen into a recession phase.”

According to official data, this is the sharpest rate of contraction that has hit Japan’s economy following the devastating disasters of 2011.

The recent halt to Japan’s exports, due to the low demand in the markets of China, the Unites States and the eurozone, is cited as one of the major causes of the contraction.

Japan’s car industry has also suffered great loss following anti-Tokyo protests across China in September over a decision by the Japanese government to nationalize parts of a group of islands in the East China Sea disputed by Tokyo and Beijing.

Commentators have envisioned that the economy of Japan is likely to shrink further in the fourth quarter of 2012.