Japan’s economy contracts 1.8% for the first time in six quarters

Japan's economy shrank 1.8 per cent in the three months through September, as a drop in exports in the face of US tariffs resulted in the first contraction in six quarters, government data showed on Monday.

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Shipments from automakers in particular plummeted, following a period of hiking exports before tariffs came into effect.

In the third quarter of 2025, gross domestic product (GDP) adjusted for inflation decreased 0.4 percent from the April-June period, also hit by a decline in residential investment, the Cabinet Office said in a preliminary report.

Exports fell 1.2 percent in the July-September period from the previous quarter, down for the first time in two quarters, driven by sluggish US-bound automobile shipments.

Imports dropped 0.1 per cent, falling for the first time in three quarters.