TOKYO (AP) — Japan's economy contracted in the latest quarter, signaling that like Europe it may already be in recession, further weighing down world growth.
On an annualized basis, the world's No. 3 economy shrank 3.5% in the July-September quarter, the government reported Monday. It was in line with gloomy forecasts after Japan's territorial dispute with China hammered exports that were already weakened by feeble global demand.
The bad news will temper optimism over recoveries in China and the U.S., where some economists are predicting growth will top 3% in the third quarter. China's painful slowdown likely bottomed out in the third quarter, with recent indicators such as factory production and auto and retail sales showing improvement. And Europe, though it may have turned a corner on its debt crisis as the financial system stabilizes, is forecast to get worse before it gets better.