Q3 GDP Falls More than Expected, Domestic Demand Contracts For 2 Straight Qtrs

Q3 Japan GDP surprised on the downside. Q/Q growth was -0.5% (-0.1% forecast and 1.1% prior). Annualized q/q growth was -2.1%, which was the weakest print since Q1 2022. The detail was also quite poor, nominal GDP q/q was flat, against a 0.6% projection (prior was 2.5%).

• Private consumption growth was flat against a 0.3% forecast and -0.9% prior (which was revised down from -0.6%). Business spending was -0.6%, against a 0.1% forecast and -1.0% prior.
• Inventories were also a drag -0.3% and net exports -0.1%, although both were close to expectations.
• Domestic demand was -0.4% q/q, against -0.7% in Q2. Weakness was evident across household consumption and private business investment.