The economy unexpectedly sank into a recession in the last quarter, unable to shake off the impact of April's consumption tax hike and raising the odds that Prime Minister Shinzo Abe will postpone a second increase next year.

Gross domestic product shrank an annualized 1.6 percent in the three months through September, the Cabinet Office reported Monday, a second consecutive decline that matches the textbook definition of a recession.

Unadjusted for price changes, the economy contracted an annualized 3 percent, the Cabinet Office said.