European stocks are expected to open flat as investors await the European Central Bank's rate decision, while most Asian equities rose on bets that China's latest stimulus measures may stabilize its stock market. The dollar strengthened against major peers, treasury yields declined, and US investors are awaiting economic data. Oil prices advanced, and Bitcoin rose near the $40,000 mark.
Japan's economy contracted by 2.1% in the third quarter, ending two consecutive quarters of expansion, due to weak consumption and exports. The lack of a growth driver and intensifying global headwinds, including slowing demand from China, pose risks of a recession. Stubbornly high inflation is impacting household spending, while manufacturers are also affected by slowing global demand. The weak growth and slowing inflation could delay the Bank of Japan's exit from negative interest rates. The disappointing GDP reading highlights the country's ongoing challenges, despite a post-pandemic rebound in domestic activity.
