Analysts: Japan's economy has contracted for the first time in six quarters, complicating the Central Bank's interest rate hike path.

Odaily News Japan's economy has contracted for the first time in six quarters, complicating the timeline for the Bank of Japan's next interest rate hike. Preliminary government data released on Monday showed that Japan's real GDP shrank by 0.4% quarter-on-quarter in the third quarter, marking the first contraction since the first quarter of 2024, and a year-on-year decline of 1.8%. The weakness in the economy may support the view that the Bank of Japan will wait until next year to take any policy measures. Specifically, from July to September, external demand caused the country's GDP to decrease by 0.2 percentage points, reflecting the impact of increased tariffs from the United States. Housing investment was another major drag, falling by 9.4% from the previous quarter. Nonetheless, economists believe this decline is due to temporary factors related to regulatory changes, and they expect the market to recover. (Jin10)