Bitcoin price today: tumbles below $90k as Fed cut doubts spark risk-off mood
Updates with analyst comments
Investing.com-- Japan’s economy shrank less than expected in the third quarter of 2025, gross domestic product data showed on Monday, as steady capital spending among businesses helped offset weak private consumption.
GDP fell 1.8% year-on-year in the September quarter, less than expectations for a drop of 2.5%. But growth turned negative from a 2.3% increase in the prior quarter, which was also revised higher.
GDP shrank 0.4% quarter-on-quarter, slightly less than expectations for a 0.6% drop and the reverse of 0.5% growth seen in the prior quarter.
The drop in GDP was widely expected, as the Japanese economy grappled with sticky inflation, sluggish private spending and as major exporters also faced high U.S. trade tariffs.
While Tokyo and Washington did hash out a trade deal, Japanese firms, especially the country’s automobile industry, remained subject to U.S. trade duties. External demand, as part of the GDP, shrank 0.2% q-o-q in Q3.
But big businesses continued to enact more capital spending, especially on shoring up local infrastructure. This pushed up overall capital expenditure by 1% in Q3, more than the 0.8% increase seen last quarter.
The print also helped offset a meager 0.1% increase in private consumption as part of GDP.
Japan’s economy faced increased trade-related headwinds in Q3, while weak wage growth and sticky inflation also largely quashed private spending.
Focus is now on new Prime Minister Sanae Takaichi’s plans for more fiscal spending and government stimulus measures.
Traders were also seen largely paring back expectations that the Bank of Japan will hike interest rates soon, amid increasing political resistance to such a move and limited strength in the Japanese economy.
Capital Economics analysts said the GDP data indicated that the BOJ was likely to keep interest rates unchanged in December.
But they noted some signs of resilience in the Japanese economy, especially as GDP data for the second quarter was revised higher.
Moreover, Japanese inflation is expected to continue remaining sticky, giving the central bank impetus to hike rates eventually. Capital Economics still sees a chance the BOJ will tighten policy in January.