Japan's Nominal Wages Advanced In October, Third Quarter GDP Contraction Deeper Than Previously Estimated

Akira Ito
08 Dec, 2025
Tokyo

Stocks in Japan lacked direction in Monday's trading, and investors reviewed the latest economic updates.

The Nikkei 225 Stock Average decreased a fraction, and the broader Topix inched higher 0.6%.  

Caution returned in Tokyo's trading as investors debated the future U.S. rate path amid growing uncertainty about the nation's monetary policy. 

The U.S. Federal Reserve is scheduled to announce its rate decisions on Wednesday, and investors are hoping that policymakers will deliver a 25 basis-point rate cut, overlooking resurgent inflationary forces. 

Moreover, China's goods exports rose at a faster-than-expected pace in November, driven by a surge in shipments to the ASEAN region and the European Union. 

China's goods trade surplus rose to $1.1 trillion in the first eleven months to November, confirming rising shipments to the non-U.S. markets.

 

Japan's Third Quarter GDP Contraction Deeper Than Previously Estimated

Closer to home, Japan's GDP in the third quarter contracted 0.6% from the previous quarter, faster than the 0.4% decline estimated previously.  

The economy contracted on a quarterly basis for the first time since the first quarter of 2024, driven by a weakness in business spending growth. 

On an annual basis, GDP growth slowed to 1.1% in the third quarter from the 2.0% annual pace in the second quarter. 

 

Japan's Real Wages Declined in October

Japan's real wages declined 0.7% in October and fell for the second consecutive month, according to data released by the Ministry of Health, Labor, and Welfare. 

Nominal wages, which include overtime payment, rose 2.6% from a year ago to 300,141 yen and advanced for the 46th month in a row. 

Despite the increase, real wages decreased after adjusting for inflation of 3.4% in the month. 

The Bank of Japan pays close attention to wage trends, as 50% of consumer spending accounts for Japan's economic activities.  

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average increased 0.1% to 50,517.40, and the broader Topix inched higher 0.6% to 3,383.74. 

Technology stocks turned lower amid rising geopolitical tensions after Japan said a Chinese fighter jet locked fire-control radar on Japanese military jets. 

Softbank Group decreased 3.3% to ¥18,655.0, Tokyo Electron inched up 0.01% to ¥33,160.0, and Advantest Corp. edged up 0.2% to ¥20,250.0.