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Japan Q3 GDP -0.4% q/q (expected -0.6%). Preliminary reading.

Posted on: Nov 17 2025

Japanese economic contraction in Q3 2025

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Japan’s economy contracted less than expected in the third quarter, with GDP falling 0.4% quarter-on-quarter versus forecasts for a 0.6% decline. On an annualised basis, output shrank 1.8%, also better than the expected 2.5% drop, as a soft global backdrop and sluggish domestic conditions continued to weigh on activity.

GDP q/q preliminary -0.4%

  • expected –0.6%, proir 0.5%

- GDP Annualised -1.8%

  • expected –2.4%, prior 1.6%

The breakdown showed a mixed picture:

  • Private consumption — roughly half of Japan’s economy — barely grew, rising just 0.1%, exactly in line with expectations and highlighting households’ ongoing caution in the face of still-elevated prices:
    • expected 0.1%, prior 0.4%
  • Capital expenditure, however, provided a rare bright spot, expanding 1.0% and beating the 0.3% consensus as firms continued to invest despite weaker demand:
    • expected 0.3%, prior 0.6%
  • External demand remained a drag. Net exports shaved 0.2 percentage points off growth, with exports down 1.2% quarter-on-quarter amid global softness and the lingering impact of trade tensions:
    • expected -0.2%, prior 0.3%
  • Domestic demand also subtracted 0.2 points, illustrating how both internal and external engines of growth stalled simultaneously.

The GDP deflator rose 2.8% year-on-year, underscoring persistent underlying inflation as the Bank of Japan assesses whether price gains are durable enough to justify further policy normalisation:

  • expected 2.8%, prior 3.0%
This article was written by Eamonn Sheridan at investinglive.com.
Reuters November Tankan shows manufacturing sentiment improving, services stable

Posted on: Nov 12 2025

Reuters November Tankan - Japanese factory mood hits 4-year high on weak yen, auto rebound

Japan’s manufacturers grew the most upbeat in nearly four years this month, lifted by a softer yen and solid global demand for cars and electronics, according to the November Reuters Tankan survey.

The manufacturers’ sentiment index jumped to +17 in November,

  • up sharply from +8 in October and marking its strongest reading since early 2022.
  • Electronics firms led the surge — their sub-index soared to +25 from +5, reflecting improved chip-related orders and export competitiveness from the weaker currency.
  • The auto and transport machinery sector also saw a large rebound, rising to +27 from +9, helped by stable orders and a cheaper yen.

Still, some respondents warned that supply disruptions and sluggish sales could cap momentum in coming months. The overall manufacturing index is expected to ease to +15 by February, with firms citing weaker output at major automakers such as Honda and Nissan, both recently cutting production targets.

Business leaders also voiced concern over U.S. President Trump’s new tariff measures and their potential to cloud export outlooks amid rising trade frictions with China.

By contrast, Japan’s non-manufacturing sentiment held steady at +27, underpinned by robust tourism and service-sector demand. The outlook for February remains unchanged, pointing to continued strength in hospitality and domestic consumption.

This article was written by Eamonn Sheridan at investinglive.com.
JP 225 forecast: the index corrected by more than 6%

Posted on: Nov 07 2025

The JP 225 stock index is trading in an uptrend, although volatility has increased significantly. The JP 225 forecast for today is positive.

JP 225 forecast: key trading points

  • Recent data: the Bank of Japan set the interest rate at 0.50% per annum
  • Market impact: the effect on the Japanese stock market is generally positive

JP 225 fundamental analysis

The Bank of Japan’s decision to keep the key interest rate unchanged at 0.50%, fully matching the forecast and previous level, means there was no monetary surprise for the market. For Japanese stock market participants, this signals that accommodative financial conditions will continue: borrowing costs for corporations and households remain low, and the equity risk premium relative to bonds remains attractive.

For the JP 225 index, which includes a significant share of exporters, industrial companies and financial institutions, the overall effect of the decision appears moderately positive. The absence of surprises reduces short-term volatility and reinforces the base scenario for valuation models: stable monetary policy, controlled bond yields and favourable conditions for corporate financing. Unless the accompanying BoJ comments point to a faster pace of tightening in the coming quarters, the JP 225 index will likely maintain its upward momentum.

Japan’s interest rate decision: https://tradingeconomics.com/japan/interest-rate

JP 225 technical analysis

The JP 225 index corrected by more than 6%, with the broader trend remaining upward. The support level is located at 48,425.0, while resistance has formed at 52,680.0.

The JP 225 price forecast considers the following scenarios:

  • Pessimistic JP 225 scenario: a breakout below the 48,425.0 support level could push the index down to 46,370.0
  • Optimistic JP 225 scenario: a breakout above the 52,680.0 resistance level could drive the index up to 55,000.0
JP 225 technical analysis for 6 November 2025

Summary

The unchanged rate supports company valuations through a lower discount rate for future cash flows and limits the growth of government bond yields, which is positive for rate-sensitive stocks such as developers, infrastructure firms, retail and the REIT segment. However, the scale of further growth will depend on external factors such as global demand dynamics, movements in US and European bond yields and changes in yen expectations. The next upside target for the JP 225 stands at 55,000.0.

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