Japan slips into recession as economy contracts for second consecutive quarter

Japan's economy has unexpectedly fallen into recession after shrinking for a second consecutive quarter, signaling challenges ahead for the nation's economic recovery.

Recent data from Japan's Cabinet Office revealed a contraction of 0.4% in the October-December quarter, with a further decline of 0.1% from the previous quarter in real GDP terms. However, real GDP for the year demonstrated a modest growth of 1.9% compared to the previous year.

Both Japan and Germany have historically thrived on strong small and medium-sized businesses with robust productivity. While Germany maintains a solid economic foundation bolstered by a strong euro and low inflation, Japan faces challenges exacerbated by a weakening yen.

Tetsuji Okazaki, a professor of economics at the University of Tokyo, noted that Japan's diminishing presence in the global economy is reflected in these latest figures. The rise of electric vehicles and other technological advancements has disrupted traditional sectors, further challenging Japan's economic prowess.

As the gap between developed and emerging economies narrows, Okazaki predicts that India will soon surpass Japan in nominal GDP, underscoring the shifting dynamics in the global economic landscape.