Tuesday, December 9, 2014

Tough Times in Japan

More bad news for global investors: The world's third-largest economy, that of Japan, has officially entered recession. The government announced yesterday that the Japanese economy contracted by 1.9 percent in the third quarter, as capital spending declined and private consumption remained weak. That marks the second consecutive quarter in which the economy shrunk, the technical definition of recession.

The third-quarter performance was worse than most economists expected. but it was much better than the country's second quarter. Japan's economy shrunk by 6.7 percent then.

Japanese Prime Minister Shinzo Abe has made the economy a cornerstone of his administration. Abe is up for re-election next week, but most observers expect him to win - recession notwithstanding.

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