Japan's third quarter recession deeper than estimated

Japan's economy shrank more than initially estimated in the third quarter of 2014, according to revised gross domestic product (GDP) figures.

The economy contracted by 1.9% in annual terms from July to September, well above a preliminary reading of 1.6%.

It also shrank 0.5% on a quarterly basis, compared with an initial estimate of 0.4%, data showed.

A big fall in business spending plunged the economy into a deeper recession.

The revised figures, which come just days before Japan's national elections, showed that business spending dipped by 0.4% from the previous quarter, instead of the 0.2% estimated in the preliminary reading.

In recession

The world's third largest economy unexpectedly fell into a technical recession after shrinking for the second consecutive quarter in July to September.

It had contracted 7.3% in the second quarter, which was the biggest fall since the March 2011 earthquake and tsunami.

An increase in the country's sales tax, which was first raised in April from 5% to 8%, had hit growth in the second quarter and still appeared to be having an impact on the economy.

The dire data had led Prime Minister Shinzo Abe to call a widely-anticipated snap election last month, to seek a mandate to delay an increase in the tax to 10%, scheduled for 2015.

The tax increase was legislated by the previous government in 2012 to curb Japan's huge public debt, which is the highest among developed nations.

Adding to the downbeat data, a Reuters poll on Monday showed that confidence among Japanese manufacturers fell in December and is expected to deteriorate further.

The Reuters Tankan sentiment index for manufacturers fell to 10 in December from 13 in November, with automakers taking a hit.

Manufacturers expect a further decline to 7 in March.