Japan's growth is expected to almost stall in the third quarter. Why the Bank of Japan will still look closely
Japan publishes its first estimate of July–September growth on Monday morning. Economists polled by Reuters expect just 0.3% at an annualised rate, down from 1.4%, with consumers spending less for the first time in nearly two years. With wholesale prices up 7.1%, the figures will shape whether the Bank of Japan raises rates in December.
What's coming
Japan's Cabinet Office publishes its first estimate of July–September GDP on Monday 16 November at 08:50 Tokyo time (07:50 in Singapore). A Reuters poll of 16 economists expects growth of 0.3% at an annualised rate, or 0.1% on the quarter, down from 1.4% annualised in April–June. That would still be a fourth quarterly rise in a row.
What's expected to drive it
- Consumers, more than half of the economy, are expected to cut spending by 0.2%, the first fall in seven quarters. Services held up, but high prices hurt spending on everyday goods, and durable goods fell, according to SMBC Nikko Securities.
- Business investment is expected to rebound by 1.5%, after a 0.9% fall.
- Trade is expected to subtract 0.4 points, after adding 0.5 in the second quarter: imports rose as Japan found other sources of crude oil to replace Gulf supplies cut by the war.
An "annualised" rate shows what growth would be if the quarter's pace continued for a full year; 0.1% in a quarter is roughly 0.3% a year. Our growth mechanic explains how GDP adds up.
Why the Bank of Japan cares
The BoJ has been raising rates slowly after decades near zero, and many analysts expect it to move again at its meeting on 17–18 December. Wholesale prices rose 7.1% in the year to October (our story), which argues for a rise. Weak consumer spending argues for caution, because higher rates would add to the squeeze on households. The BoJ's job is to judge whether inflation is coming from strong demand, which rate rises can cool, or from costs such as oil and a weak yen, which they cannot fix as directly. See how central banks respond to inflation.
Where it sits in the chain
This is Link 5, the real economy, feeding back into Link 1: an oil shock raises prices and squeezes households at the same time, which is the hardest mix for a central bank.
What to watch
- Whether consumption actually fell, and by how much.
- Japan's consumer prices for October, due on 19 November: economists expect 2.6%, according to CMC Markets.
- The yen's reaction.
- 1Inflation
- 2Central bank
- 3Expected rates
- 4Long-term yields
- 5Real economy
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Sources
- Reuters poll of 16 economists (6 November 2026), as reported by Investing.com and IndexBox
- Release time: Cabinet Office schedule, as reported by Reuters