TOKYO , Japan ( CNN ) -- Japan -- the world 's second-largest economy -- is in a recession , government officials announced Monday . Japan 's Cabinet Office confirmed that its economy shrank another 0.1 percent in the third quarter , following a 0.9 percent drop in the second quarter . The country 's gross domestic product -- second to the United States -- has fallen by 0.4 percent this year , pushing Japan into its first recession since 2001 . Major indexes around the globe have plummeted over the last two months . The Russian stock market has lost 65.5 percent of its value since the start of the year . Stocks in Japan and the United States have been equally hard hit , falling 42 percent and 33 percent , respectively . In Europe , the pain has been particularly acute . The European Union on Friday officially declared that the 15-nation group had entered into a recession , with its gross domestic product declining 0.2 percent for the second straight quarter . Japanese Prime Minister Taro Aso was among the Group of 20 world leaders who met in Washington over the weekend , unveiling a set of sweeping plans aimed at tackling the ever-expanding economic crisis , which has roiled financial markets worldwide . The G-20 members at the historic two-day meeting managed to find some common ground on the causes of the crisis and areas that need to be fixed . The plans include interest rate cuts by central banks around the globe or potential economic stimulus packages , and boosting developing countries struggling under the weight of the crisis . Japan 's recession announcement was not unexpected . Part of the problem is the strong yen , which skyrocketed in recent weeks as turmoil in the world 's financial markets and concerns about a global recession drove investors away from high-yielding currencies such as the euro and the pound . As a result , lower-yielding currencies like the dollar and the yen surged in value , because they are considered by many investors to be a safe haven . Since Japan is such a big exporter of goods , a more robust yen hurts profits for Japanese firms as sales from abroad get translated back into yen . The more that the yen has climbed , the worse Japan 's stock market has performed , which has resulted in a ripple effect on European and U.S. exchanges . After an early sell-off Monday , Japan 's Nikkei 225 stock index rebounded with a gain of about 2 percent late in the morning . CNN 's Junko Ogura and Kyung Lah contributed to this report .
Cabinet Office confirms the economy fell 0.1 percent in third quarter . Japan 's gross domestic product has fallen by 0.4 percent this year . Major indexes around the globe have plummeted over the last two months . EU declared last week that the 15-nation group had entered into a recession .