Japan's economy shrank less than first thought in the fourth quarter of 2008 but still logged its worst performance in almost 35 years as exports collapsed, the government said today.
The world's second-largest economy contracted 3.2% in the three months to December - 12.1% on an annualised basis - as the global downturn choked off demand for cars, high-tech goods and other exports, data showed.
The revised figure was slightly better than the initial estimate of a 12.7% drop but it was still the worst quarter since early 1974.
Japan was once seen as relatively immune to the financial crisis, but its economy is now shrinking much faster than many others, including the US. The government says the crisis is the deepest since World War II.
Finance Minister Kaoru Yosano called for concerted action to jump-start the global economy. 'We can make our policies more effective by each country taking fiscal stimulus measures simultaneously,' he said ahead of a weekend meeting of finance chiefs from the Group of 20 nations in Britain.
Recent data point to another sharp contraction in the first quarter of 2009.
Japan logged a record current account deficit in January as exports almost halved from a year earlier, while factory output has plummeted. The country's recovery from the 1990s recession was driven almost entirely by brisk exports.
But the global downturn has caused demand for Japanese goods to dry up, prompting companies to shed tens of thousands of jobs.
Japan's banks escaped the worst of the sub-prime loan crisis but its manufacturers have been badly hurt because their products, such as cars and televisions, often drop off consumer shopping lists when times are tough.
Corporate icons such as Sony and Toyota are heading for big losses in the current financial year because of weak demand and the strength of the yen, which is bad for export earnings.
Japan has announced a series of stimulus packages to spur growth, though huge public debt - a hangover from efforts to spend its way out of the 1990s recession - has left it with limited ammunition to fight the crisis.
The central bank has slashed interest rates to 0.1% and taken steps to spur lending, such as purchases of bonds, as it seeks new ways to try to unblock credit markets.
