Japan's economy sank into recession with the gross domestic product contracting for a second straight time in the third quarter, revised estimates from the Cabinet Office showed Monday.

GDP fell an annualized 3.5 percent in the September quarter, in line with preliminary figures. At the same time, the Cabinet Office revised down the estimates for the second quarter to show a 0.1 percent contraction.

The GDP fell 0.9 percent quarter-on-quarter in the third quarter, in line with preliminary estimates.

Private consumption, which accounts for roughly 60 percent of the economy, was down 0.4 percent compared to the initial estimate of 0.5 percent drop.

The decline in capital spending was revised to 3 percent from 3.2 percent.

Separately, a survey published by the Cabinet Office and the Ministry of Finance revealed the Japan's business sentiment worsened in the fourth quarter. The business survey index for all industries was -5.5 in October-December, compared with 2.2 in July-September.

Sentiment is expected to recover in the first months of 2013. In manufacturing, business sentiment index fell to -10.3 in October-December from 2.5 in July-September. Confidence among non-manufacturers also worsened with the corresponding index falling to -2.9 from 2.

Japan's current account surplus fell less than expected in October, separate data from the Finance Ministry showed today. The surplus on the current account dropped to JPY 376.9 billion from JPY 503.6 billion in the previous month.

This was 29.4 percent lower than in the same month last year. Economists had forecast the surplus to be JPY 230.9 billion.

RTTNews