Tourism and Investment in Japan

According to the Japan Tourism Bureau, foreign tourists who visited Japan in February 2020 had sharply declined by hefty 58% compared to the same month last year due to the spread of the new coronavirus infection.  The number of foreign tourists to Japan in February was estimated at 1,085,100. This is the fifth consecutive and the largest decline since April 2011 when it fell by 62.5% immediately after the Great East Japan Earthquake.  Chinese tourists decreased by 87.9% from the same month last year, and Korean tourists, which had already begun declining due to the deterioration of Japan-Korea relations, fell further by 79.9% after the coronavirus spread got severe.  As for other parts of the world, far less tourists from a wide range of countries and regions such as Asia, Europe and the United States came to Japan with Taiwan decreasing by about 45% and the United States by about 21%.  The Japanese government has set a goal of 40 million foreign visitors to Japan this ye

Cinemas are deserted with few visitors and retailers close their stores earlier to reduce deficit.  Major Japanese department stores lost sales in March by about 20% to 40% compared to previous year due to increasing new coronavirus cases now reaching 1,750 as of March 21 including the Diamond Princess cruise ship cases.  In March, clusters of infections were found in Aichi, Osaka, and Hyogo prefectures with up to 60 newly confirmed cases per day.  Cases of infection with unknown routes are increasing in urban areas and current situation is on the verge of explosive spread.  It took about two months for infected cases to rise to 500 from the first domestic confirmation in January.  However, since then, the number of infections newly confirmed per day has soared to between around 30 to 60 taking only 10 days the cases to increase to 1,000 from 500.  There is concern that various social activities will be kept suspended and consumers appetite continue to be extremely sup

Tokyo Olympics postponement and recession to come The new coronavirus continues spreading throughout Japan with cases reaching 1,422 including cruise ship passengers and crews as of 10:00 pm on March 13.  The spreading infections which WHO finally declared a pandemic, have started affecting the 2020 Tokyo Olympics.  Since it is difficult to forecast when coronavirus infection will subside, people concerned  started to discuss whether the Olympics should be held as planed or postponed.  If the Olympics Games are postponed, it seems to be certain that the Japanese economy which is already weakened badly by the consumption tax hike, will fall into a more severe recession.  In addition to the possibility of calling off, the pandemic is beginning to drag down Japan's real economy.  According to a February Economy Watcher Survey released by the Japanese Cabinet Office on March 9, an DI index showing the current state of the economy was 27.4, down 14.5 points from the prev

Coronavirus outbreak weakens Japan's economy Downward trend in Japan’s economy is becoming obvious recently. According to the preliminary report on the Indexes of Business Conditions for January released by the Japanese government on March 6, the assessment of business conditions is worsening for sixth month in a row. This is the longest deterioration since Lehman crisis in 2008.  The leading index which is an indicator of the economy several months later was 90.3, down 0.7 points from the previous month. Meanwhile, coincident index showing the current economic situation rose 0.3 points month-on-month to 94.7, rising for the first time in four months.  Both indexes follow declining trend for the current twelve months. The Minister in charge has commented that the effects of the new coronavirus spreading globally has had a considerable impact on the Japanese economy.  In addition, a Family Income and Expenditure Survey for January released by the government on the same d

The spread of coronavirus is beginning to affect Japan's real economy The novel coronavirus cases continue to be newly identified in various parts of Japan, and total cases confirmed in Japan by March 4 topped 1,000 including cruise ship passengers and crew.  The spread of coronavirus is beginning to affect Japan's real economy. According to a survey by the Japan Automobile Dealers Association, the total number of orders received by eight dealers in February 2020 was down hefty 17.1% from the same month of the previous year.  New car registrations in February also declined 10.7%, to 268,302 units. In China the automobile parts procurement network for Japanese automakers may be badly disrupted, and it is concerned that sales and profits of those companies will further stagnate.  In addition, large events are canceled and schools are closed simultaneously nationwide to prevent the spread of the infections.  Parents scramble to find childcare services for their childre

Covid-19 outbreak and employment in Japan The job openings-to-applicants ratio in January, announced by the Ministry of Health, Labor and Welfare, dropped sharply by 0.08 points from the previous month to 1.49.  The employment situation, which had been solid until now, has begun to show signs of deteriorating.  In addition to the weak economy after the consumption tax hike last October, the downside risk caused by the spread of the new coronavirus is increasing.  This is the first time since May 2017 for the active job openings to applicant’s ratio to fall below 1.5.  The ratio was about 1.6 at the first half of 2019 and recent apparent decline may show the employment is likely to have peaked out.  With the novel coronavirus spreading in Japan and overseas, the employment situation may not improve in the near term.  In addition to the stagnating employment, the impact is rampant everywhere . On February 28, the government has called for temporary closure of elementary