Japan’s real gross domestic product declined at an annualized rate of 1.8% in the three months through September, the first economic contraction reported by the country in six quarters.
The fall was less pronounced than expected. Economists and analysts polled by Reuters had been anticipating a 2.5% fall.
Japan’s GDP in the third quarter was down 0.4% on quarter. Weaker domestic demand and sluggish exports drove the decline. Exports fell 1.2% while imports dropped 0.1% as U.S. tariffs started to bite.
Japan and the United States reached a deal in July to reduce the tariffs President Donald Trump had imposed since April. The reciprocal tariff rate was set at 15%, which was higher than the baseline 10% but still lower than the 25% previously threatened.
New tariffs on automobiles and auto parts were cut in half, with the new rate set at 15%.
Real private housing investment declined by 9.4% in the third quarter, reflecting in part the introduction of new rules requiring new buildings to meet eco-friendly standards.
