Japan Downgrades Economic Outlook Amid Weak Domestic Demand

First contraction in three quarters observed as capital spending and private consumption fall, prompting government response.

Japan's government has downgraded its economic outlook for the first time in 10 months due to weak domestic demand.
The Cabinet Office has cut its view on capital spending, noting a pause in the recent pick-up due to slowing global growth, particularly in China.
Japan's economy contracted for the first time in three quarters in July-September, with GDP falling at an annual real rate of 2.1%.
Despite improvements in business conditions and firms' earnings, these are not translating into wages and investment.
The government has compiled a package of measures worth more than 17 trillion yen ($113 billion) to mitigate the impact of inflation.