Japan's Economic Pulse: Consumption Surge and Tepid Capital Spending

Japan's economy grew by 0.9% from July to September, slower than the previous quarter, with weak capital spending. Yet, private consumption surged, supporting forecasts of inflation and justifying potential rate hikes. External factors like U.S. policies and China's economic weakness loom as uncertainties for Japan.

Japan's economy expanded by 0.9% annually over the July-September quarter, surprising markets with stronger-than-expected consumption, though slowed by weak capital spending, government data revealed Friday.

This slower growth is significant as it highlights vulnerabilities amid potential slowdowns in the U.S. and China, impacting Japan's trade.

Economists suggest that while private consumption is growing, risks from overseas and fluctuating financial markets may affect Japan's broader economic recovery and inflation targets set by the central bank.

(With inputs from agencies.)