DHAKA: Japan's economy contracted in the final three months of 2015, adding to a string of setbacks for the government's economic reform policy.

Between October and December, it shrank by 0.4% compared with the previous quarter, official figures show, reports the BBC.

Expectations for the numbers were for a quarterly contraction of 0.3%.

Weaker domestic demand, together with slower investment in housing, contributed to the disappointing numbers.

On an annualised basis, the economy contracted 1.4% during the period. That compares with expectations for an annualised contraction of 1.2%.

Prime Minister Shinzo Abe's plan to revive the economy - dubbed Abenomics - was introduced after his December 2013 election win.

The aim has been to combat deflation, which Japan has struggled with for nearly two decades, as well as boost demand and investment.

But the the world's third-biggest economy has been facing problems.

In the three months to September, according to revised numbers, it avoided a technical recession. But it has been in recession four times since the global financial crisis.

BDST: 0835 HRS, Feb 15, 2016
RS