The Japanese economy fell back into recession in the third quarter after it contracted by 0.8% compared with last year.

For an economy to be in a technical recession, it must shrink in two consecutive quarters. Japan recorded growth of -0.7% in the second three months of the year.

It is the fourth recession Japan has experienced since the financial crisis started in 2008. Compared with the previous quarter, the economy fell 0.2% in the third quarter. More than the 0.1% expected by economists.

Business spending dropped 1.3%, compared with forecast falls of just 0.4% - also the consecutive month in which it had fallen. Despite record profits for many businesses in Japan, they are wary of investing in wages and the company.

Private consumption, which accounts for around 60% of the Japanese economy, grew 0.5%. Consumer spending picked up after suffering a large fall last year when the government increased its sales tax.

Economics minister Akira Amari said: "While there are risks such as overseas developments, we expect the economy to head toward a moderate recovery thanks to the effect of various (stimulus) steps taken so far."