A slew of headlines from Japan flooded markets this week, increasing speculation that Prime Minister Shinzo Abe will pursue a second consumption tax hike, but experts say that Monday's preliminary growth figures remain crucial to his decision.
Gross domestic product (GDP) for the July-September quarter will be released before Tokyo's market open and is widely expected to be the critical factor in Abe's decision on whether to increase the consumption tax to 10 percent from 8 percent currently.
Economists surveyed by Reuters predict the world's third-largest economy expanded an annualized 2.1 percent, recovering from the previous quarter's 7.1 percent contraction - the biggest since 2009 due to the April consumption tax hike.
HSBC forecasts for a 2 percent annualized rise, while Harumi Taguchi, principal economist at IHS Global Insight, expects a 2.5 percent rise.
"The risks are to the downside, I wouldn't be surprised if we saw a number printed below 1 percent. That would definitely underscore the weakness of the recovery," said HSBC economist Izumi Devalier.
The services sector accounts for roughly 70 percent of the domestic economy, so consumer-related data are crucial for a higher GDP figure. However, the picture remains gloomy. Annual real wages and household expenditure declined in each month during the past quarter. Meanwhile, consumer confidence has deteriorated since August, while the Economy Watchers survey, published by the government, has remained below the 50 level that denotes pessimism from optimism.