Japan’s economy shrank almost 2% in the three months through September, as a drop in exports in the face of U.S. tariffs resulted in the first contraction in six quarters, government data showed on Monday.

Shipments from automakers in particular plummeted, following a period of hiking exports before tariffs came into effect.

Still, as the overall contraction was not as acute as expected, it likely represents a temporary setback rather than the start of a recession, economists said.

“The contraction is largely due to one-time factors such as housing investment” affected by regulatory change, said economist Kazutaka Maeda at Meiji Yasuda Research Institute.

“Exports also reacted,” he said. “Overall, the economy lacks strong underlying momentum, but the trend still points to a gradual rec

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