Unexpectedly, Japan's economy contracted in the third quarter as inflation and a weak yen hit the country.
According to preliminary data released by the Cabinet Office, the country's seasonally adjusted real gross domestic product (GDP) declined 0.3% from the previous quarter.
At an annual rate, GDP fell 1.2% in the July to September quarter, missing expectations for a 1.1% expansion.
It was also down from the revised reading for the second quarter which posted 4.6% growth.
The unexpected contraction reflects the impact of the sharp fall in the Japanese currency and shows the path to a strong recovery from Covid-19 is still a long way off.
The depreciation of the yen has also increased the country's import costs due to soaring energy prices, weighing on net trade.
However, policymakers expect the government's latest economic stimulus package to help boost growth in the coming months.
In addition, the reopening of Japan's borders also offers the prospect of inbound spending by foreign tourists following the low value of its currency.
