Home coronavirus outbreak Covid-19 pandemic sinks Japan business mood to lowest since 2009 crisis

Covid-19 pandemic sinks Japan business mood to lowest since 2009 crisis


By: Reuters | Tokyo |

Published: July 1, 2020 10:04:37 am


Japan coronavirus, Japan business sinks, Japan crisis, Covid-19 pandemic, The dismal readings reinforce expectations Japan is headed for deep recession due to the fallout from the pandemic.

Japanese manufacturers’ confidence sank in the second quarter to levels not seen since the 2009 global financial crisis, underscoring the damage the coronavirus pandemic inflicted on the export-reliant economy.

The Bank of Japan’s “tankan” survey also showed big non-manufacturers’ mood tanked to a decade low, as lockdown measures put in place through May forced businesses to shut and consumers to stay at home.

The dismal readings reinforce expectations Japan is headed for deep recession due to the fallout from the pandemic. “Industries across the board seemed to have been hit hard by a sharp decline in demand, underscoring the extensive damage caused by the coronavirus pandemic,” said Hiroshi Shiraishi, senior economist at BNP Paribas Securities.

The headline index for big manufacturers’ sentiment hit -34 in June, worse than a median market forecast for -31 and the lowest level since June 2009. The 26-point drop from March was the second-fastest pace of decline on record.

The index measuring big non-manufacturers’ sentiment fell 25 points to -17 in June, the worst reading since December 2009. Big firms expect to increase capital expenditure by 3.2% in the year to March 2021, exceeding market estimates of a 2.1% gain but lower than the plans made three months ago.

“There’s a chance big firms may revise down their spending plans,” said Shinichiro Kobayashi, senior economist at Mitsubishi UFJ Research and Consulting. “The pace of any economic recovery will be slow.”

In a sign the gloom is affecting the jobs market, companies expect to slash new hires by 5.6% in fiscal 2021 from a year ago, which would be the first drop since 2010. Among big firms, sentiment hit record lows for restaurants, hotels and machinery makers.

But supermarkets, home centres and retailers saw conditions improve on demand for “stay-at-home” and teleworking goods, a BOJ official told a briefing.Japan slipped into recession for the first time in 4-1/2 years in January-March and is set to suffer its deepest postwar slump in the current quarter.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Coronavirus Outbreak News, download Indian Express App.

Source link

Leave a Reply

Most Popular

Opinion | Making It Work

The value of women’s work, both paid and unpaid, has never been more apparent than during the coronavirus crisis. As Diane Coyle recently noted...

China rebuffs study on G4 strain of swine flu virus, says it does not infect humans easily

China's Ministry of Agriculture and Rural Affairs said on Saturday that the so-called "G4" strain of swine flu virus is not new and does...

Aamir Khan’s daughter Ira moves to her new house, shares pic

Image Source : INSTAGRAM/KHAN.IRA Ira Khan shared the pictures of her new home on Instagram. Adulting has begun for Aamir Khan's...

Walking together for 10 years has been a team work: Sakshi’s heartwarming post on a decade of married life with MS Dhoni

Sakshi Singh posted a heartwarming message on social media as she celebrates 10 years of married life with MS Dhoni. MS Dhoni and...