Japan’s economy shrank much faster than estimated in Q3 as global supply disruptions hampered exports and spending as new COVID-19 cases disrupted the consumer mood.
- Even though many analysts expect the Japanese economy to recover this quarter as virus curbs ease, worsening global production constraints pose increasing risks to export-dependent Japan.
- Takeshi Minami, the chief economist at Norinchukin Research Institute, stated that the contraction was far bigger than anticipated due to supply chain problems that slowed car output and capital spending.
- Minami further stated that they expect the economy to recover this quarter, but the rate of recovery will be slowed as consumption continues to struggle to pick up after COVID-19 curbs were eased off.
The economy contracted an annualized 3.0% in July-September after a revision of 1.5% increase in Q2. Preliminary GDP data revealed a much weaker than the average market forecast of a 0.8% contraction.
Nikkei 225 up +0.56%, JPY USD up +0.05%Source: Cabinet Office