MNI BRIEF: Japan Q3 GDP Posts 1st Contraction in 3 Quarters

Japan's economy for the third quarter posted the first contraction in three quarters, falling 0.5% q/q or 2.1% annualised, in the wake of weak private consumption and capital investment, preliminary GDP data released by the Cabinet Office showed on Wednesday.

The drop followed a Q2's revised 1.1% q/q rise, or an annualised revised 4.5%. The Q3 growth was weaker than the MNI median forecast that pointed to a drop of 0.1% q/q, or an annualised -0.3%.

Private consumption, which accounts for about 60% of Japan's GDP, fell 0.0% q/q in Q3, after a revised 0.9% fall in Q2. The median forecast was for a 0.2% q/q rise. Business investment fell 0.6% q/q in Q3 following an unrevised 1.0% fall in Q2. The median forecast was for a 0.3% rise.

Net exports of goods and services -- exports minus imports -- made a negative 0.1 percentage point contribution to total domestic output after pushing Q2 GDP growth up 1.8 pp. Exports rose 0.5% q/q after rising 3.9% q/q in Q2, while Imports rose 1.0% after falling 3.8%.

Private-sector inventories contributed a negative 0.3 pp to Q3 GDP following 0.0 pp in Q2, while public investment fell 0.5% q/q, contributing -0.0 pp to GDP.