Japan GDP up slightly more than expected in Q3, but private consumption weakens

Japanese Economic Growth in Q3

Investing.com — The Japanese economy showed modest growth in the third quarter, slightly exceeding earlier estimates due to strengthened export demand and capital spending. However, private consumption growth was downgraded.

Key Statistics

• Year-on-Year GDP Growth: 1.2% (Revised from 0.9%)
• Quarter-on-Quarter GDP Growth: 0.3% (Revised from 0.2%)

The revised GDP figures indicated less severe contraction in both capital expenditure and external demand than initially expected.

However, private consumption remained a significant drag on the economy, with its growth revised to 0.7% from 0.9%. Earlier increases in private consumption, driven by substantial wage increases, appear to be plateauing.

The GDP price index, which serves as an inflation indicator, was also adjusted to a slightly lower rate of 2.4% from 2.5%.

The sharp decline in GDP growth during the third quarter raised concerns about the effectiveness of improving wages in stimulating economic growth.

This soft economic reading further fueled skepticism regarding the Bank of Japan's ability to increase interest rates. The market remains uncertain about potential rate hikes by the BOJ in the coming week.