Japan's economy contracted by 0.6% in the second quarter of the year, heightening fears of a recession in Asia's biggest economy.
Gross Domestic Product shrank by 2.4% on an annualised basis, according to official figures - the first contraction in a year.
Economic growth for the first quarter of 2008 was also revised down to 0.8% quarter-on-quarter from 1% previously.
The slowing global economy took a heavy toll on Japanese exports, which tumbled 2.3% in the second quarter.
Household spending fell 0.5% as soaring commodity and food prices, coupled with sluggish wages, prompted consumers to tighten their purse strings.
Business investment - which had been a key driver of Japan's recovery from recession in the 1990s - dropped 0.2%.
Japan's economy has enjoyed a gradual recovery in recent years from a slump stretching back more than a decade, but there are concerns that the export-led recovery has now stalled.
Given the fragile health of the economy, analysts do not expect the Bank of Japan to raise its super-low interest rates from the current level of 0.5% any time soon, despite the highest inflation in a decade.
