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Japan's Q3 GDP Revision Shows 2.3% Annualized Contraction

Economists say the downgrade does little to shift expectations for a Bank of Japan rate hike on Dec. 18–19.

Overview

  • The Cabinet Office now estimates output fell 0.6% from the prior quarter, the steepest annualized slide since the third quarter of 2023.
  • Capital expenditure was revised to a 0.2% decline from an initially reported 1.0% rise, signaling weaker private investment.
  • Private consumption edged up 0.2% as domestic demand subtracted 0.4 percentage point and net exports took 0.2 point off growth.
  • Detailed figures show exports fell 1.2% and private residential investment dropped 8.2% in the quarter, while imports slipped 0.4%.
  • Reuters-sourced reports indicate the government would tolerate a December policy rate increase at the BOJ despite the softer data.