Japan’s economy shrank by 1.8% in the third quarter compared to the same period last year, as trade tensions with the country’s two biggest export markets dragged on sales.
Though the figures were better than expected, they nevertheless pointed to the impact US tariffs have had on Japanese exports. Meanwhile, Japanese Prime Minister Sanae Takaichi’s recent comments that her country could respond militarily were China to invade Taiwan — a self-ruled island Beijing claims as its own — are threatening ties between the Asian nations. In a bid to ease the row, Tokyo sent a trade envoy to Beijing today.
Japan also faces major domestic challenges: Despite flatlining consumption, inflation stood at 2.9%, significantly above the Bank of Japan’s target.
