The Japanese economy contracted by approximately 0.4% in the third quarter of this year, ending in September, marking its first contraction in six quarters, according to data released by the Japanese Cabinet Office on Monday morning during the Asian trading session. This was better than the expected decline of 0.06% and compared to a revised 0.5% growth in the second quarter of this year. On an annualized basis, however, the economy contracted by 1.8%, reflecting the impact of tariffs on exports in the world’s third-largest economy, as well as a decline in private residential investment.

Exports fell by 4.5% year-on-year in the third quarter, while imports decreased by 0.1%. Private consumption, which accounts for more than half of Japan’s economic output, rose by 0.1%, while private residential investment fell by 32.5% year-on-year and by 9.4% quarter-on-quarter.