Japan's GDP suffers steep decline

Japan's gross domestic product, or the total value of the nation's goods and services, dropped at an annual pace of 12.7 per cent in the fourth quarter of 2008, the government said Monday.

That's the steepest drop for Japan since the oil shock of 1974. It far outpaces declines of 3.8 per cent in the United States and 1.2 per cent in the euro zone.

The contraction underscores the vulnerability of Asia's export-driven economies during global downturns and points toward more cuts in jobs, production and profits in the coming months. A survey of economists by the Kyodo news agency had projected an 11.6 per cent fourth-quarter contraction.

It was Japan's third straight quarter of decline.

The news sent the benchmark Nikkei 225 index lower when stock markets opened, but it quickly rebounded, rising 1.52 per cent in morning trading.