{"id":207461,"date":"2020-05-18T06:43:42","date_gmt":"2020-05-18T06:43:42","guid":{"rendered":"http:\/\/www.thetruthseeker.co.uk\/?p=207461"},"modified":"2020-05-20T05:34:33","modified_gmt":"2020-05-20T05:34:33","slug":"japan-braces-for-worst-postwar-slump-as-pandemic-tips-economy-into-recession","status":"publish","type":"post","link":"https:\/\/www.thetruthseeker.co.uk\/?p=207461","title":{"rendered":"Japan braces for worst postwar slump as pandemic tips economy into recession"},"content":{"rendered":"

Leika Kihara, Tetsushi Kajimoto \u2013 Reuters May 18, 2020<\/strong><\/h1>\n

Japan\u2019s economy slipped into recession for the first time in 4-1\/2 years in the last quarter, putting the nation on course for its deepest postwar slump as the coronavirus crisis ravages businesses and consumers.<\/span><\/p>\n

Monday\u2019s first-quarter GDP data underlined the broadening impact of the outbreak, with exports plunging the most since the devastating March 2011 earthquake as global lockdowns and supply chain disruptions hit shipments of Japanese goods.<\/span><\/p>\n

Analysts warn of an even bleaker picture for the current quarter as consumption crumbled after the government in April requested citizens to stay home and businesses to close, intensifying the challenge for policymakers battling a once-in-a-century pandemic.<\/span><\/p>\n

\u201cIt\u2019s near certainty the economy suffered an even deeper decline in the current quarter,\u201d said Yuichi Kodama, chief economist at Meiji Yasuda Research Institute. \u201cJapan has entered a full-blown recession.\u201d<\/span><\/p>\n

The world\u2019s third-largest economy contracted an annualised 3.4% in the first quarter, preliminary official gross domestic product (GDP) data showed, less than a median market forecast for a 4.6% drop.<\/span><\/p>\n

The slump came on top of an even steeper 7.3% fall in the October-December period, with the consecutive quarters of contraction meeting the technical definition of a recession. Japan last suffered recession in the second half of 2015.<\/span><\/p>\n

The coronavirus, which first emerged in China late last year, has ravaged the global economy as many nations went into strict lockdowns to curb the outbreak that has so far killed over 310,000 people worldwide. The pandemic has been massively disruptive on supply chains and businesses, particularly in trade-reliant nations such as Japan.<\/span><\/p>\n

Indeed, the fallout of the virus on corporate Japan was telling with exports diving 6.0% in the first quarter, the biggest decline since April-June 2011.<\/span><\/p>\n

\u201cExports to China began to fall in February, followed by a wave of slumping shipments to Europe and the United States,\u201d said Takeshi Minami, chief economist at Norinchukin Research Institute.<\/span><\/p>\n

\u201cExports were also hurt by slumping inbound tourism,\u201d which counts as a drop in non-residents\u2019 purchases of Japanese services, he said.<\/span><\/p>\n

DEEPER SLUMP, SLOWER RECOVERY<\/h3>\n

The shakeout in global trade was underlined in recent March data, with exports shrinking the most in nearly four years due to plunging U.S.-bound shipments.<\/span><\/p>\n

Even the nation\u2019s major globe-trotting manufacturers weren\u2019t spared the pandemic\u2019s sweeping impact.<\/span><\/p>\n

Toyota Motor Corp (7203.T<\/a>) has said it will cut domestic vehicle production by 122,000 units in June and expects an 80% drop in full-year operating profit.<\/span><\/p>\n

The gloom in Japan is expected to deepen over coming months.<\/span><\/p>\n

Analysts polled by Reuters estimate Japan\u2019s economy will shrink an annualised 22.0% in the current quarter, which would be a record decline, with pressure on output intensifying after Prime Minister Shinzo Abe in April declared a nationwide state of emergency amid the widening pandemic.<\/span><\/p>\n

The emergency was lifted for most regions on Thursday, but remained in effect for some big cities including Tokyo. Japan has so far reported 16,337 coronavirus cases and 756 deaths.<\/span><\/p>\n

Private consumption, which accounts for more than half of Japan\u2019s $5 trillion economy, slipped 0.7% in January-March, less than a market forecast for a 1.6% drop, as robust demand for daily necessities partially offset the impact on services spending.<\/span><\/p>\n

All the same, it marked the second straight quarter of decline, as households endured the double-whammy of the coronavirus and a sales tax hike to 10% from 8% in October last year.<\/span><\/p>\n

Capital expenditure fell 0.5% in the first quarter after plummeting 4.8% in October-December last year, the GDP data showed, suggesting that uncertainty over the outlook is discouraging companies from boosting spending.<\/span><\/p>\n

Taken together, domestic demand knocked 0.7 percentage point off GDP growth, while external demand shed 0.2 point.<\/span><\/p>\n

All of this has put a strain on the labour market. The jobless rate in March rose to its highest in a year, while job availability slipped to a more than three-year low.<\/span><\/p>\n

Continues \u2026 <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Coronavirus takes it toll on Japan\u2019s economy with rising joblessness and declining sales <\/p>\n","protected":false},"author":39262,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[66],"tags":[],"class_list":["post-207461","post","type-post","status-publish","format-standard","hentry","category-Economics"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/207461","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/users\/39262"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=207461"}],"version-history":[{"count":2,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/207461\/revisions"}],"predecessor-version":[{"id":207463,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/207461\/revisions\/207463"}],"wp:attachment":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=207461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=207461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=207461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}