Japan Slowdown Flashes Warning to Abe as Reforms Await

Japanese companies eased off on capital-spending growth in the third quarter and failed to step up exports even with a cheaper yen, contributing to an economic slowdown that puts pressure on Prime Minister Shinzo Abe.

Gross domestic product rose at an annualized 1.9 percent, down from 3.8 percent the previous quarter, with the gain relying on government spending and an accumulation of inventories, the Cabinet Office reported in Tokyo. A widening trade gap lopped off 1.8 percentage point from growth. Corporate investment increased 0.7 percent, down from 4.4 percent.