Overview
- Government data show GDP fell 0.4% quarter-on-quarter in July–September, a 1.8% annualized decline and the first contraction in six quarters.
- Exports dropped 1.2% on the quarter as the U.S. imposed a 15% tariff on most Japanese imports after earlier front‑loading by firms boosted prior shipments.
- Domestic demand was mixed, with private consumption up 0.1%, capital expenditure rising 1.0%, and housing investment weakening under new energy‑efficiency rules.
- The result was better than forecasts for a 0.6% quarterly fall or a 2.5% annualized drop, and several projections point to a partial rebound in the fourth quarter.
- Prime Minister Sanae Takaichi’s government is preparing a stimulus package to ease living‑cost pressures, and the print is seen as reducing pressure on the Bank of Japan to tighten quickly.