Overview
- Preliminary data show real GDP fell 0.4% quarter on quarter in Q3, or 1.8% annualised, a milder decline than forecasts and the first contraction since early 2024.
- Private consumption inched up 0.1% from the prior quarter, indicating households remained cautious as living costs stayed elevated.
- Capital expenditure rose 1.0%, beating consensus and suggesting firms kept investing despite weak overall demand.
- External weakness dragged on growth as net exports shaved 0.2 percentage points and exports fell 1.2% quarter on quarter.
- The GDP deflator increased 2.8% from a year earlier, keeping focus on BOJ normalization prospects as the government compiles a stimulus package.