Japan’s Economy Shrinks 1.8 Pct in July-Sept.

Tokyo, Nov. 17 (Jiji Press)–Japan’s economy in July-September shrank at an annualized rate of 1.8 pct from the previous quarter after price and seasonal adjustment, contracting for the first time in six quarters, the Cabinet Office said in a preliminary report Monday. The gross domestic product reading represents a 0.4 pct decline on a nonannualized basis. Exports of goods such as vehicles slumped due to high tariffs imposed by U.S. President Donald Trump. Economists surveyed by Jiji Press had predicted a 2.4 pct annualized decrease in the GDP, the value of goods and services produced within the country. Personal consumption, which is a major part of domestic demand, was up 0.1 pct quarter on quarter, marking an increase for the sixth consecutive quarter. Beverage sales grew on the back of the intense heat. Spending on dining out and on railway travels also expanded. On the other hand, sales of vehicles and clothing were sluggish. Capital spending grew 1.0 pct, posting an increase for the fourth straight quarter, reflecting solid expenditures related to software and personal computers. Housing investment plunged 9.4 pct, following an increase in the previous quarter amid a spike in last-minute housing demand ahead of the introduction of a mandatory energy-saving standards to new homes. Public investment rose 0.1 pct. Exports dropped 1.2 pct, after registering an increase in the previous quarter. Reflecting the full-blown negative impact of the U.S. tariffs introduced in and after April this year, exports of vehicles, chemical products and general-purpose machinery fell. Consumption by visitors to Japan, counted as exports in the governmental statistics, registered a drop. Imports sagged 0.1 pct, reflecting reduced purchases of crude oil and natural gas. Domestic and external demand each made a negative contribution of 0.2 percentage point to the July-September GDP growth. In nominal terms, the GDP grew 0.1 pct in the third quarter of 2025 for an annualized rise of 0.5 pct. Pointing to the increases in personal consumption and capital investment, economic and fiscal policy minister Minoru Kiuchi said in a statement that there are “no changes” to the government’s assessment that the Japanese economy is recovering gradually. END [Copyright The Jiji Press, Ltd.]