Japan economy shrinks as firms cut capex, recession looms
External demand accounted for 0.7 percentage points of July-September GDP contraction, matching the median projection. Japan's exports fell 5.0 percent in July- September, the biggest slide since a 6.0 percent decline in April-June last year, the data showed.
A row with China over sovereignty of some islands in the East China Sea sparked violent protests in China and the boycott of Japanese goods, which added to the slide in exports, particularly for automakers such as Nissan Motor Co.
Private consumption - which accounts for roughly 60 percent of the economy - fell 0.5 percent in the third quarter against a median forecast of a 0.6 percent drop.
Capital expenditure tumbled 3.2 percent, the fastest pace of decline since a 5.5 percent drop in April-June 2009, as companies turned more pessimistic about earnings from domestic and overseas markets.
In Japan's ailing electronics sector, Sony plans to reduce capital spending by 29 percent in the year to March 2013 and Panasonic plans a 27 percent cut, after incurring huge losses in their TV manufacturing businesses.
The companies are struggling to compete with more nimble rivals, such as South Korea's Samsung Electronics and America's Apple Inc, and with a steady rise in the yen, which makes exports from Japan more expensive.
Analysts said Japanese companies face too many uncertainties to plan future spending with confidence and
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