Well, with the 'dropped dollar' running full steam ahead over in Washington, this is hardly shocking news:
Japan's economy stood still in the three months to March, after four quarters of expansion, as a slowdown in exports sapped growth momentum and left the economy heading back toward recession. Economists blamed the slowdown on a fall in exports to the US, and a pre-Sars drop in shipments to Asia. With Japanese companies struggling to increase revenues in the deflationary domestic market, many say only exports can drive an economic recovery. Gross domestic product in the first quarter of the calender year was flat, having grown 0.5 per cent between October and December, 0.8 per cent in the quarter before that and 1.4 per cent between April and June. Heizo Takenaka, economics minister, said the GDP data showed that in addition to structural reform more effort was needed to fight deflation.One measure of deflation, the GDP deflator - also released Friday - plunged 3.5 per cent in the three months to March, the biggest drop ever. The figure suggested deflation is more severe than indicated by Japan's consumer price index.
Source: Financial Times