Japan’s economy contracted in Q3 on covid disruptions in a sign that it will be long struggle to ever raise interest rates.

• GDP annualized -3.6% vs -3.1% expected (first estimate was -3.0%)
• Private consumption -1.3% vs -1.1% prelim
• External demand 0.0% vs +0.1% prelim
• Inflation deflator vs -1.1% prelim
• Capex -2.3% vs -3.9% expected

This isn’t a great slate of data but at least there were some better capex numbers. Indications are that private consumption rebounded in October/November but omicron will add a fresh reason to stay home.