The annualized 1.2 percent fall in Japan's gross domestic product in the July-September period is widely deemed to be the product of a series of major natural disasters that hit the country this summer, which dragged down both domestic demand and exports. The resiliency of the economy will be tested in the current quarter to December. Optimism is unwarranted, however, over the course of the economy in the coming months as caution lingers over the impact that the intensifying trade war between the United States and China will have on global growth. The third-quarter GDP dip may be no cause for alarm, but we should still be on guard against a possible downturn.

The first GDP contraction in two quarters was the sharpest in two years and nine months. Personal consumption, which accounts for 60 percent of this nation's GDP, fell 0.1 percent from the previous quarter (when it expanded 0.7 percent), while capital investment by businesses dropped 0.2 percent for the first decline in eight quarters.

The series of big natural disasters — the torrential rains that caused landslides and flooding in broad areas of western Japan in July and claimed the lives of more than 200 people, the powerful typhoon that crippled Kansai International Airport in early September and the subsequent big earthquake that hit southern Hokkaido — not only dampened consumer sentiment but also hampered exports by temporarily halting the operation of manufacturing plants.