Introduction: Japan’s financial system contracts as exports are hit by US tariffs
Good morning, and welcome to our rolling protection of enterprise, the monetary markets and the world financial system.
Donald Trump’s commerce wars proceed to bruise the worldwide financial system, dampening demand and weakening commerce hyperlinks.
Japan is the most recent nation to point out the results – its financial system has shrunk for the primary time in six quarters.
Japanese GDP fell by 0.4% within the July-September quarter, new official data shows, as its producers’ exports have been hit by the tariffs imposed by the US this yr.
Exports have been a key driver of the contraction; they fell by 1.2% in contrast with the April-June quarter, and have been 4.5% decrease than a yr in the past.
Again in April, Trump threatened Japan with a brand new 25% tariff on its items on the US border, which was minimize to fifteen% in July when the 2 international locations reached a commerce deal.
Personal demand additionally fell, by 0.3% quarter-on-quarter.
On an annualised foundation, Japan’s actual gross home product shrank by 1.8% on an annualized foundation within the three months by September. Though that’s higher than the two.4% fall which economists had anticipated, it may bolster new prime minister Sanae Takaichi’s case to compile an bold stimulus programme.
Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities says (through Bloomberg):
“Japan’s financial system was strong within the first half of this yr and at present’s GDP confirmed that momentum is halted quickly.
I anticipate Japan’s financial system to be again on a average restoration pattern going ahead.”
The White Home has belatedly woken as much as the impression of tariffs on Individuals (who pay the levies) too – late final week, Trump lowered the tariffs on meals imports, together with beef, tomatoes, espresso and bananas, amid rising issues about rising prices.
The agenda
-
8am GMT: Swiss GDP report for Q3
-
10am GMT: European Fee releases Autumn 2025 Financial Forecast
-
3pm GMT: US building spending information for August
Key occasions
Though WPP’s shares have slipped again just a little (+3.7%), they’re nonetheless main the FTSE 100 risers.
AJ Bell funding director Russ Mould sums up the state of affairs:
“Executives at embattled promoting company WPP have recently been snapping up shares in the company and it appears they will not be the one ones who see worth within the enterprise. There’s hypothesis a couple of bid from French rival Havas and personal fairness companies reportedly seeking to decide off bits of the enterprise.
“After years when it felt like WPP’s shares had been struggling a sluggish puncture, the tyre has burst in inventory market phrases for the corporate in 2025. This led to the departure of CEO Mark Learn and buyers within the US apparently being rallied by regulation companies for a category motion lawsuit alleging they have been misled in regards to the state of the enterprise.
“WPP has loads of transferring elements which could possibly be an impediment to any takeover deal for the group as a complete however, with the shares buying and selling at low ranges final seen greater than 1 / 4 of a century in the past, it’s weak to being picked aside.”
EC lifts 2025 eurozone progress forecast after pre-tariff export growth
The European Fee has raised its forecast for progress within the eurozone financial system this yr.
In its newest forecasts, the EC says financial progress has exceeded expectations within the first 9 months of the yr, with actual GDP progress outperforming its spring forecasts.
This faster-than-expected enlargement is partly because of the surge of exports to the US earlier this yr, as corporations stocked up forward of Donald Trump’s tariffs.
The Fee now expects the eurozone will develop by 1.3% in 2025, up from the 0.9% forecast in its spring forecasts. Development is then anticipated to sluggish to 1.2% in 2026, down from 1.4% forecast six months in the past, after which rise to 1.4% in 2027.
The EC says:
This better-than-expected efficiency was initially attributable to a surge in exports forward of anticipated tariff will increase, however funding in tools and intangible belongings additionally carried out extra strongly than anticipated — most notably in Eire, but in addition in different international locations.
Continued progress within the third quarter is testimony to the resilience of the European financial system and its capacity to navigate unprecedented shocks.
Development forecast for 2026 (%):
🇲🇹3.8
🇵🇱3.5
🇱🇹3.0
🇭🇷2.9
🇧🇬2.7
🇨🇾2.6
🇸🇪2.6
🇸🇮2.4
🇭🇺2.3
🇪🇸2.3
🇬🇷2.2
🇵🇹2.2
🇩🇰2.1
🇪🇪2.1
🇨🇿1.9
🇱🇺1.9
🇱🇻1.7
🇪🇺1.4
🇳🇱1.3
🇩🇪1.2
🇧🇪1.1
🇷🇴1.1
🇸🇰1.0
🇦🇹0.9
🇫🇮0.9
🇫🇷0.9
🇮🇹0.8
🇮🇪0.2Autumn #ECForecast → https://t.co/BHrNVrGGs6
— European Fee (@EU_Commission) November 17, 2025
A person convicted over a 2020 Twitter hack that compromised accounts of high-profile figures together with former U.S. President Barack Obama has been ordered to repay £4.1m price of Bitcoin, Reuters studies.
The hack, additionally concerned the accounts of Joe Biden, Elon Musk, Invoice Gates, Jeff Bezos and Apple.
Compromised accounts despatched a sequence of tweets proposing a basic bitcoin rip-off: followers have been instructed that in the event that they transferred cryptocurrency to a particular bitcoin pockets, they’d obtain double the cash in return….
The FTSE 100 share index has dipped this morning, transferring additional away from final week’s document highs.
The UK’s blue-chip share index is down 11 factors, or 0.12%, at 9687 factors. Luxurious trend group Burberry (-4.6%) are the highest faller, because the dipomatic spat between Beijing and Tokyo threatens to hit spending by Chinese language tourisms in Japan.
Richard Hunter, head of markets at interactive investor, says:
Burberry and to a lesser extent HSBC have been below stress given the strain in Asia, whereas the beleaguered WPP rose on some imprecise bid hypothesis arising from weekend studies.
Goldman Sachs: Purchase UK authorities debt as unemployment rises
UK authorities bonds are secure this morning, after a selloff final Friday when information broke that chancellor Rachel Reeves had scrapped controversial plans to raise income tax.
Information of the chancellor’s tax u-turn drove up the price of borrowing, as buyers anxious that this month’s funds would possibly create much less fiscal headroom than the markets hoped.
Goldman Sachs are recommending shopping for UK authorities debt, predicting that bond costs will rise (pushing down rates of interest, or yields).
They level out that will increase within the unemployment price sometimes result in decrease yields (increased bond costs) over time, telling purchasers:
The latest deterioration within the labour market factors to additional draw back threat to UK yields, as labour market softness ought to translate right into a stronger basis for decrease inflation in 2026, alongside ongoing disinflationary progress, and an upcoming contractionary funds.
As Goldman Sachs factors out, traditionally, will increase within the unemployment price elevate the chance of recession. The “Sahm rule”, an indicator developed by US economist Claudia Sahm, alerts a recession if the rise within the unemployment price over a 12-month interval reaches a selected threshold.
They are saying:
As exterior MPC member Megan Greene has pointed out, the UK’s “Sahm Rule” threshold is round 0.75 – that means an increase within the 3-month common unemployment price from the lows of the trailing 12 months to above this stage has been an indicator of recessions since 1975. The most recent unemployment price within the UK was 4.97%, and the rise within the “Sahm” indicator over the lows of the final 12m has been 0.71.
If the unemployment price rises above 5.2% within the subsequent three months, the recession threshold will probably be triggered.
WPP shares bounce on takeover hypothesis
A flurry of takeover hypothesis has pushed shares in promoting group WPP increased initially of buying and selling in London.
WPP’s shares are up 4.7%, main the risers on the FTSE 100 share index, following studies that a number of potential suitors have thought-about a bid.
UPDATED: In accordance with the Sunday Occasions, French rival Havas has held inner talks a couple of doable deal involving WPP, whereas non-public fairness companies Apollo and KKR have seemed right into a doable bid.
This curiosity comes after WPP’s share value fell to its lowest stage since 1998 earlier this month, after it slashed its income steering for the yr and its new chief government Cindy Rose stated its latest efficiency has been “unacceptable”.
The Sunday Occasions reported:
It isn’t clear whether or not any formal bids for WPP will materialise. Bidders may search to purchase the corporate in its entirety, take giant stakes within the enterprise or try to choose off elements of the holding group.
It’s understood there have been talks at a excessive stage inside Havas, which is led by [billionaire Vincent] Bolloré’s son Yannick, in regards to the potential for a deal involving WPP.
WPP’s shares have fallen by nearly two-thirds thus far this yr, as the corporate has been hit by fears that synthetic intelligence instruments will eat its revenues.
This has left the corporate weak to being relegated from the FTSE 100 on the subsequent quarterly reshuffle….
Swiss financial system shrank 0.5% in Q3
Newsflash: Switzerland’s financial system shrank within the third quarter of the yr too!
Switzerland, which has additionally been badly hit by the Trump commerce wars, has simply reported that its financial system shrank by 0.5% in July-September in contrast with the earlier three months.
The downturn is being blamed on weak spot within the chemical and pharmaceutical sectors, which have been each damage by the brand new tariffs imposed by Donald Trump this yr.
Switzerland’s State Secretariat for Financial Affairs says:
Pushed by a pointy decline in worth added within the chemical and pharmaceutical sector, trade as a complete recorded damaging progress. The companies sector grew at a below-average price.
Business as a complete declined whereas the companies sector grew at a below-average price, the federal government added.
This may add to the aid in Zurich that they’ve reached a take care of Trump that cuts tariffs on Switzerland from 39% to fifteen% as a part of a brand new commerce pact.
G7 progress leaderboard
Japan is the primary of the G7 international locations to report its financial system contracted within the final quarter.
With the US but to report GDP information for Q3 2025, right here’s the leaderboard:
-
France: + 0.5% quarterly progress
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UK: +0.1%
-
Canada: +0.1% (provisional estimate)
-
Germany: 0%
-
Italy: 0%
-
Japan: -0.4%
Japan’s tourism shares hunch as diplomatic rift with China deepens
In addition to information that its economy shrank in the last quarter, Japan has additionally been hit by an escalating dispute with China over Taiwan.
Shares in Japanese tourism and retail corporations have fallen at present, after China suggested its residents to keep away from travelling to Japan.
This transfer by Beijing escalated a diplomatic feud sparked by feedback from Tokyo’s new prime minister, Sanae Takaichi, on the opportunity of deploying forces within the occasion of a hypothetical Chinese language assault on Taiwan.
This triggered a wave of promoting throughout Japanese leisure shares.
Shares in Oriental Land, which operates Tokyo Disneyland, have fallen by 5.7% at present. Division retailer chain Isetan Mitsukoshi, which makes substantial gross sales to Chinese language guests, has tumbled by 11.3%.
Journey shares have been hit too, with Japan Airways falling 3.75%.
Masahiko Lavatory, a senior mounted revenue strategist at State Road Funding Administration in Tokyo, explains:
“The China–Japan dispute over Taiwan and Beijing’s advisory discouraging journey to Japan introduces near-term headwinds for consumer-facing sectors.
“Chinese language guests account for roughly 25% of Japan’s inbound visitors, making shops, luxurious retail, and hospitality notably weak.”
Introduction: Japan’s financial system contracts as exports are hit by US tariffs
Good morning, and welcome to our rolling protection of enterprise, the monetary markets and the world financial system.
Donald Trump’s commerce wars proceed to bruise the worldwide financial system, dampening demand and weakening commerce hyperlinks.
Japan is the most recent nation to point out the results – its financial system has shrunk for the primary time in six quarters.
Japanese GDP fell by 0.4% within the July-September quarter, new official data shows, as its producers’ exports have been hit by the tariffs imposed by the US this yr.
Exports have been a key driver of the contraction; they fell by 1.2% in contrast with the April-June quarter, and have been 4.5% decrease than a yr in the past.
Again in April, Trump threatened Japan with a brand new 25% tariff on its items on the US border, which was minimize to fifteen% in July when the 2 international locations reached a commerce deal.
Personal demand additionally fell, by 0.3% quarter-on-quarter.
On an annualised foundation, Japan’s actual gross home product shrank by 1.8% on an annualized foundation within the three months by September. Though that’s higher than the two.4% fall which economists had anticipated, it may bolster new prime minister Sanae Takaichi’s case to compile an bold stimulus programme.
Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities says (through Bloomberg):
“Japan’s financial system was strong within the first half of this yr and at present’s GDP confirmed that momentum is halted quickly.
I anticipate Japan’s financial system to be again on a average restoration pattern going ahead.”
The White Home has belatedly woken as much as the impression of tariffs on Individuals (who pay the levies) too – late final week, Trump lowered the tariffs on meals imports, together with beef, tomatoes, espresso and bananas, amid rising issues about rising prices.
The agenda
-
8am GMT: Swiss GDP report for Q3
-
10am GMT: European Fee releases Autumn 2025 Financial Forecast
-
3pm GMT: US building spending information for August
