Japan’s economy contracted more than expected in the last three months of 2011 as a rising yen and floods in Thailand hurt businesses.

Gross domestic product shrunk by 2.3 per cent during the period from a year earlier, much worse than 1.4 per cent contraction that analysts had forecast.

Compared with the previous three months, the economy shrank by 0.6 per cent. The numbers are a big blow to Japan’s efforts to recover from the earthquake and tsunami last year.

The slowdown of exports is taking a heavy toll on industry. The data comes amid concerns of a slowdown in the global economy.