According to preliminary data,it is seen that Japan's economy has fallen back to recession . The annualised data based on the third quarter shows that the economy shrank by 0.8%.This trend started since the second quarter when it fell by 0.7% due to decreased domestic demand.
There is an increased pressure on government and the central bank of Japan to stimulate the economy in order to counter this decline. However according to an interview conducted by BBC
Marcel Thieliant, economist at research firm Capital Economics, said "policy-makers have showed "considerable reluctance" to respond to weaker growth with more stimulus as inflation accelerates, and he does not expect more easing at the central's meeting this week.
The upshot is that the Bank's preferred inflation measure, which excludes prices of fresh food and energy, should start to moderate soon," he said in a note.
We therefore remain convinced that more stimulus will eventually be needed, and now believe that the January meeting is the most likely venue for its announcement".
Japanese companies have also started to be wary of this since also business spend also fell by 1.3% against a initial forecast of 0.3%
But it is not all bad news for Japan since private spending which accounts for 60% of the economy rose by 0.5% from the previous quarter.
Eyes are now on the central bank of Japan to see what measures they will come up with, to ease the burden on the economy.However there is hope since the government is positive that a recovery is under way.
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