Nikkei 225 retreats as Japanese economy shrinks

The Nikkei 225 has retreated as the Japanese economy suffers contraction in the third quarter.


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By :  ,  Financial Analyst

Japan's economy has shrunk, depressing the Nikkei 225 benchmark in Tokyo, as the country's businesses suffer from fewer export orders.

Compared to the same time last year, gross domestic product contracted by 3.5 per cent over the third quarter – and this weak data is likely to put pressure on policymakers to boost stimulus measures to drive expansion.

Anti-Japanese protests in China over an ongoing territorial dispute concerning a clutch of islands in the East China Sea have damaged Japan's business with the world's second-largest economy.

China is Japan's largest trading partner and major firms including Toyota and Honda have reported markedly lower sales in the Asia superpower in recent months.

Furthermore, domestic consumption remains subdued, while the nation is trying to recover from the earthquake and tsunami that damaged production last year.

At 09:40 GMT today (November 12th), the Tokyo Nikkei 225 was lower by 0.9 per cent to an index value of 8676.44 points.

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