Economists define recession as two consecutive quarters of negative GDP growth - or better said, two consecutive quarters of GDP decline. Japan may qualify at the end of the next quarter. You might want to read Japan Plunges Into Deep Recession; GDP Shrinks 3.5% Annualized; Japan Current Account Turns Negative First Time in 30 Years; watch the Yen for a summary of what one commentator thinks is going on in Japan.
You also might want to read Japan faces prospect of fifth recession in 15 years. That article reports that Japan:
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is increasingly dependent on exports;
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recorded a current account deficit in September for the first time since records on that have been kept (1985); and,
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may be in for serious debt sustainability issues that may soon be recognized by the financial markets.
From my reading of these articles it strikes me an important question is how much the ongoing economic issues in other developed economies (read the obvious European Union countries - Greece, Italy, Ireland, Portugal, Spain and the United Kingdom for starters - and the United States) prospectively will impact Japan going forward. It appears that from here Japan may require an ever more careful eye on the part of traders and investors.
Topical Reference: Japan Plunges Into Deep Recession; GDP Shrinks 3.5% Annualized; Japan Current Account Turns Negative First Time in 30 Years; watch the Yen, from Mish's Global Economic Trend Analysis, Michael Shedlock, November 12, 2012 - reading time 4 minutes. Also read Japan faces prospect of fifth recession in 15 years, from The Financial Post, John Shmuel, November 12, 2012 - reading time 3 minutes.
