WASHINGTON - Japan's economy contracted in the second half of 2012 and is on track for lackluster growth of 0.8 percent this year, hurt in part by its bitter territorial row with China, the World Bank said in a report on Tuesday.
Relations between China and Japan, the world's biggest economies after the United States, have deteriorated sharply since September, when the Japanese government purchased islands in the East China Sea that China claims.
The value of Japanese exports to China fell by 17 percent between June and November of last year, contributing to a 3.5 percent annualized drop in Japan's growth in the third quarter.
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