Japan’s economy shrank unexpectedly in the third quarter as private consumption fell and the cost of imports rose. Asia’s second-largest economy shrank 0.3 percent in the July-September period, official data showed on Tuesday, after three straight quarters of growth. The worse-than-expected performance translates into an annual contraction of 1.2%. Private consumption, which accounts for more than half of Japan’s $5 trillion economy, rose 0.3 percent, well below the previous quarter’s 1.2 percent gain. While corporate investment rose, private residential investment fell, Japan’s Cabinet Office said. Meanwhile, a rise in import costs offset a 1.9 percent rise in exports, according to official data. In addition to the global economic slowdown and headwinds, including the war in Ukraine, Japan is grappling with a falling yen, which has exacerbated rising cost-of-living pressures on households and businesses. The Japanese currency fell to a 32-year low in October, hitting 151 yen per US dollar, although it has since recovered some of its losses. Japanese Prime Minister Fumio Kishida last month unveiled a $260 billion stimulus package aimed at supporting the economy. “We want to protect people’s livelihoods, employment and businesses while strengthening our economy for the future,” Kishida told reporters at the time.
