Japan’s economy unexpectedly shrank in the three months through September as the yen’s historic slide battered growth momentum, leaving the country’s recovery from the pandemic in a vulnerable spot amid mounting fears of a global slowdown.
Gross domestic product contracted at an annualized pace of 1.2% in the third quarter, slipping into reverse for the first time since last year, the Cabinet Office reported Tuesday. Economists had expected an expansion of 1.2%.
The surprise contraction reflects the impact of Japan’s embattled currency on the economy and shows the path toward a solid recovery from the pandemic remains long, with further risks clouding the outlook.