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Japan Sinks Into Recession

Economic downturn could last a year

By Peter Fearon, Newser Staff

Posted Nov 17, 2008 2:39 AM CST

(Newser) – The financial crisis rippling through the global economy has claimed another casualty as Japan has slipped into its first recession in seven years, Reuters reports. Third quarter statistics reveal a 0.1% contraction in Japan's Gross Domestic Product. Japanese economists warn the nation could languish in recession for an entire year and that interest rates may be cut further.

A key economist predicted continuing bad news, "given the fact that we can no longer rely on exports as overseas economies are slowing down." Stocks in Asia and Europe were down today, led by financial and energy shares, hit by continuing concerns about the world economy. "We are not seeing any kind of recovery," said an analyst.

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President Bush greets Prime Minister Taro Aso of Japan as he arrives at the White House for the G20 Summit last week. Japan has slipped into a recession as a result of the global financial crisis. (AP Photo/Lawrence Jackson)

Pedestrians stop to study an electric market board in Tokyo. Japan has slipped into a recession as a result of the global economic crisis. (AP Photo/Katsumi Kasahara)

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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. - Japan's Economy Minister Kaoru Yosano.

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Japan Sinks Into Recession