TOKYO » Japan’s economy contracted in the latest quarter, signaling that like Europe it already may be in recession, further weighing down world growth.

A weakening of Japan’s economy could have a negative impact on Hawaii’s tourism industry, which relies on travelers from Japan for about one-fifth of its total visitor count.

On an annualized basis, the world’s No. 3 economy shrank 3.5 percent in the July-September quarter, the government reported Monday. It was in line with gloomy forecasts after Japan’s territorial dispute with China hammered exports that were already weakened by feeble global demand.

Hawaii received 1.06 million visitors from Japan through the first nine months of this year, up 16 percent from the same period in 2011. Those travelers spent $1.9 billion during the period, up 22 percent from a year earlier.

Japan’s outlook remains bleak, with most economists forecasting a further decline in economic activity for the October-December quarter, which would officially put it in a recession according to the common definition of two consecutive quarters of contraction.

Consumer spending fell 0.5 percent in the third quarter, as subsidies for auto purchases expired, and corporate capital spending fell 3.2 percent. Spending on reconstruction from the country’s March 2011 tsunami and nuclear disasters also has weakened.

The drop for the current October-December quarter may not be as severe as that experienced in July-September.

"If the economy does recover in any way, it will be a minute rebound," said David Rea, an economist in London with Capital Economics.

He said the contraction in Japan’s gross domestic product in the final quarter of 2012 could be a couple of percentage points.