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

Odaily Planet Daily reports that Japan's economy contracted for the first time in six quarters, further complicating the timeline for the Bank of Japan's next interest rate hike. Preliminary government data released Monday showed that Japan's real GDP shrank by 0.4% quarter-on-quarter in the third quarter, the first contraction since the first quarter of 2024, and contracted by 1.8% year-on-year. The economic weakness may support the view that the Bank of Japan will wait until next year to take any policy action. Specifically, in the July-September quarter, external demand contributed 0.2 percentage points to the country's GDP decline, reflecting the impact of US tariff increases. Housing investment was another major drag, falling 9.4% from the previous quarter. Nevertheless, economists believe this decline is due to temporary factors related to regulatory changes and expect the market to recover. (Jinshi)