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Japan enters recession

Japan, the world's second largest economy after the United States, is in a recession. According to MarketWatch.com, this is the first time Japan has been in a recession since 2001.

Declining overseas demand, according to Market Watch, accounted for a considerable percentage of Japan's fall in the rate of its gross domestic product growth. As other countries face similar financial issues, Japan's automobile and electronics markets are being affected, reported the Associated Press.

However, Glenn Maguire, an Asia-Pacific economist with Societe Generale in Hong Kong, said that Japan's improved employment policies, limited financial leverage, and generally lean industrial sector all are factors that will help cushion Japan's economy in its fall.

In an effort to help Japan's ill economy, Prime Minister Taro Aso has unveiled two economic stimulus packages since taking office in September. This includes his latest proposal of a 27 trillion-yen ($275.7 billion) package that involves expanded credits for small businesses and a total of 2 trillion-yen ($20.4 billion) in cash disbursements to households.

Japan's banks have joined central banks around the world in bringing down borrowing costs. The Bank of Japan, for instance, cut its key interest rate for the first time in more than seven years.