Japan's economy shrank in the three months to September, official data showed today, after a string of natural disasters hit consumer spending and exports, and China's slowing economy cast a shadow.
Japanese gross domestic product for the three months from July to September contracted 0.3% from the previous quarter, reversing growth of 0.8% in the three months from April to June, the Cabinet Office said.
A number of natural disasters dampened personal consumption, company investment and exports, analysts said.
"Natural disasters forced consumers to stay indoors and halted factory operations, which led to a slowdown in production and investment activities," they added.
Japan was hit by several natural disasters this summer, including massive flooding in western regions due to torrential rains, a typhoon that inundated a major international airport, and an earthquake in the north that disrupted supply lines.
The temporary closure of the Kansai International Airport also led to a fall in tourism and overseas shipments.
Exports of Japanese goods and services were down 1.8% from the second quarter, with private consumption slumping 0.1% and corporate investment in plants and equipment off 0.2%.
But analysts anticipated a rebound in the last quarter of the year thanks to a broadly solid global economy.
They said they remained optimistic that the economy will improve and while they remain cautious on China-US trade, the global economy continues to show solid growth and exports should continue to rise.
Japan has announced a long-delayed sales tax hike will go into effect in October 2019 to address the nation's huge public debt, despite warnings it could hobble growth by dampening already lacklustre consumer spending.
The point-of-sale tax will rise from 8% to 10% as the ageing and heavily indebted country battles to finance snowballing social security bills - especially medical fees.
The last such move - in April 2014 - was blamed for tipping Japan into a brief recession.
This time, Prime Minister Shinzo Abe believes he can avoid a sharp decline in consumer spending by introducing measures to cushion the blow, including plans to leave the sales tax on food unchanged.
