Japan’s economy contracted unexpectedly in the third quarter. This is bitter for Prime Minister Fumio Kishida’s economic policy.

Based on preliminary data, the government announced on Tuesday that gross domestic product (GDP) fell by 0.3 percent between July and September compared to the previous quarter. Extrapolated for the year, this corresponds to a decrease of 1.2 percent. It is the first time in four quarters that Japan’s economic output has fallen. This is bitter news for Prime Minister Fumio Kishida’s government, which had just announced a multi-billion dollar stimulus package. In market circles, an increase in GDP was generally expected.