Japan slipped into recession again between July to September in what is being seen as a blow to the prime ministers economic policies - also known as "Abenomics" - which have struggled to pull the economy out of long term stagnation.
The recession is Japan's fourth in five years, which means the country's GDP, or the size of the economy, has declined for two consecutive quarters since the global financial crisis.
Japan's GDP shrank 0.8 per cent in the third quarter compared to a year earlier and 0.2 per cent on the previous quarter, worse than forecasts that it would suffer a 0.1 per cent decline.
Analysts have said the data shows that Japan needs reforms to address a shrinking workforce because of the country's ageing population.
"Abenomics' first two arrows of monetary and fiscal stimulus were meant to buy time, but Japan failed to make progress with painful reforms needed to boost its growth potential," said Hiroshi Shiraishi, senior economist at BNP Paribas Securities.
"Without reform (the 'third arrow'), the economy's growth potential remains low, making it vulnerable to shocks and to suffering recessions more often."
Akira Amari, Japan's economics minister, said that Japanese companies should raise wages and increase spending to stimulate growth, rather than waiting for the government to inject more cash into the economy.
Additional reporting by Reuters
