Japan’s surprise recession

Japanese stocks remain a good bet despite the unexpected contraction in the country's growth.

Most economists expected Japan's economy to bounce back from its dip in the second quarter. Not for the first time, they got it wrong. GDP shrank by an annualised 1.6% between June and September. That means Japan has fallen into recession defined as two successive quarters of falling output for the fourth time since 2008.

The government increased the sales tax the equivalent of VAT in April. Consumers brought forward spending, so GDP rose strongly in the first quarter, then slumped in the second. By the third quarter, the squeeze on spending was supposed to have been shrugged off.

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Andrew Van Sickle
Editor, MoneyWeek

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.