Japan's Economic Growth

Japan’s economy showed slight growth in the third quarter, growing 0.9% year-on-year, exceeding expectations but slowing sharply from the previous quarter.

Key Highlights

• GDP Growth:

  • Year-on-Year: 0.9% (expected 0.7%)
  • Quarter-on-Quarter: 0.2% (slowed from 0.5%)
  • Revised previous quarter from 2.9% to 2.2%

• Private Consumption:

  • Grew 0.9% quarter-on-quarter, much higher than the expected 0.2%. This was supported by earlier wage hikes.

• External Demand:

  • Fell 0.4% quarter-on-quarter, signaling weakness in exports.

• GDP Price Index:

  • Grew less than expected, indicating slower inflation growth.

Economic Concerns

Despite strong private consumption, the economy is facing weakened exports and pressure from a strong USD/JPY rate. The GDP results cast doubt on the Bank of Japan's ability to raise interest rates amid increased political uncertainty following recent election outcomes. New governmental leadership may face significant pressure to support economic stability.