Japan Slips into Recession, Loses Third-Largest Economy Spot

Japan unexpectedly slipped into a recession at the end of last year, losing its position as the world's third-largest economy to Germany. Weak demand in China, sluggish consumption, and production halts at a unit of Toyota Motor Corp point to a challenging path to economic recovery. The unexpected recession raises doubts about when the Bank of Japan will begin to exit its ultra-loose monetary policy, with some analysts warning of another contraction in the current quarter. Despite expectations for the central bank to phase out its massive monetary stimulus this year, the weak data may cast doubt on its forecast for rising wages to underpin consumption and keep inflation around its 2% target.