Recession Hits Japan

Japan, the world’s second biggest economy, has officially fallen into an economic recession. The nation’s export business continues to crumble against the rising Yen and analysts predict that the Japanese economy is set for its longest ever contraction.

The island’s Gross Domestic Product – the entire value of one nation’s products and services – made an unexpected drop of 0.4 percent (economist estimates compiled by a Kyodo news agency predicted a rise), following the previous quarterly drop of a revised 3.7 percent. A recession is defined by two successive quarterly GDP drops for a nation or continent.

Signs of the nation’s economic decline can be seen in Edge news stories over the past several months, from Sony’s shocking profit outlook cut of 57 percent, to last week’s global market report which showed that the Japanese software market took a 21 percent drop from last year (though Nintendo remains an exception.)

Perhaps the biggest danger for Japan’s videogame market was the news that the nation saw its volume of business investments drop 1.7 percent from the previous quarter.

Japan’s economy minister Kaoru Yosano (pictured) said in a news conference that "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," Mr Yosano added.

The last time Japan hit a recession was only seven years ago. The nation now joins a growing list of major countries that have posted successive GDP losses, such as Germany, Italy, Spain and Ireland. A report last week suggested that America are likely to officially enter a recession soon.
via Edge