Japan slides into recession as tax hike takes toll

Japan slides into recession as tax hike takes toll - Houston Chronicle:
"TOKYO (AP) — Japan's economy unexpectedly shrank in the third quarter as housing and business investment declined following a tax hike, dragging the country into a recession and further clouding the outlook for the global economy.
The world's third-largest economy contracted at a 1.6 percent pace in the July-September quarter, the government said Monday, contrary to predictions it would grow after a big drop the previous quarter. The surprise deepens uncertainty when China's growth is slowing and the 18-country eurozone grew only 0.2 percent in the same quarter.
The gross domestic product figures showed across-the-board weakness in demand among consumers, manufacturers and builders.
Many individuals and companies had spent money before the sales tax was hiked in April from 5 percent to 8 percent, and spending has languished since then.
"The impact of the sales tax was much more severe than expected," said Junko Nishioka, an economist at RBS Japan Securities."