Q3 GDP 2.1 annualised, 0.5 qtrqtr
Consumption 0.0 qtrqtr, capex 0.6, exports 0.5
Japan lacks growth driver as global headwinds intensify

TOKYO, Nov 15 Reuters Japan39;s economy contracted in JulySeptember, snapping two straight quarters of expansion on soft consumption and exports, complicating the central bank39;s efforts to gradually phase out its massive monetary stimulus amid rising inflation.

The data suggests stubbornly high inflation is taking a toll on household spending, and adding to the pain for manufacturers from slowing global demand including in China.

Given the absence of a growth engine, it wouldn39;t surprise me if the Japanese economy contracted again in the current quarter. The risk of Japan falling into recession cannot be ruled out, said Takeshi Minami, chief economist at Norinchukin Research Institute.

The weak growth and the spectre of slowing inflation could delay the BOJ39;s exit from negative interest rates, he said.

Gross domestic product GDP in the world39;s thirdlargest economy contracted 2.1 in the third quarter, government data showed on Wednesday, a much larger decline that a median market forecast for an annualised 0.6 fall. It followed an expansion of 4.5 in the previous quarter.

The weak reading reflects lacklustre consumption and capital expenditure, dashing policymakers39; hopes for a postpandemic rebound in domestic activity to offset weaker external demand from China and elsewhere.

Consumption was flat in JulySeptember…