Japan's economic output has recorded its sharpest quarterly fall in almost seven years as the country appears to be falling into recession.
The world's second largest economy contracted at an annualised rate of 3% in the April to June quarter, as both domestic demand and exports weakened.
It was the first decline in more than a year, and the biggest since the third quarter of 2001.
The government has called on firms to raises wages to help boost spending.
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"It is desirable that income for employed people increases," said Economy and Fiscal Policy Minister Kaoru Yosano.
"We want company managers to recognise that pay rises would compensate for price rises."
Last month the Japanese government announced an economic stimulus package worth 11.7 trillion yen ($107bn; Ј61bn).
A country is generally considered to be in recession when it sees two consecutive quarters of declining economic output.
(BBC)
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