News Summary: Japan economy shrinks in 3rd quarter

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THE SLOWDOWN: Japan's economy contracted in the latest quarter, signaling that like Europe it may already be in recession, further weighing down world growth.

THE DETAILS: The world's third-largest economy shrank 3.5 percent in the July-September quarter, in line with gloomy forecasts after Japan's territorial dispute with China hammered exports that were already weakened by feeble global demand.

LOOKING AHEAD: Japan's outlook remains bleak, with most economists forecasting a further decline in economic activity for the October-December quarter, which would officially put it in a recession according to the common definition of two consecutive quarters of contraction.