Japan's economy contracts 2.1%, surpassing estimates

Japan's economy contracted by 2.1% on an annualised basis in Q3, exceeding economists' predictions of a 0.4% decline. This setback, driven by decreased business spending, stagnant consumer spending, and higher imports, highlights the vulnerability of Japan's economic recovery, according to a Bloomberg report. The results, signalling the need for ongoing support from the Bank of Japan (BOJ) and the government, could delay any BOJ policy changes towards normalisation. The yen also weakened against the dollar after the report. BOJ Governor Kazuo Ueda indicated that the bank would maintain its current stance until a stable cycle of wages, prices, and growth is established, despite recent progress towards the 2% inflation target.