Coronavirus outbreak threatens Tokyo Olympics and Japanese economy

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 previous month. 

This was the lowest level since April 2011, immediately after the Great East Japan Earthquake. The Economy Watcher Survey is one of the major indicators investors are closely watching. 

It selects more than 2,000 workers, such as employees of retail stores and taxi drivers to ask their judgment about current economic conditions. 

The results of February survey are considered showing that consumers who are afraid of infection are avoiding to go out and eat out forcing domestic demand to drop significantly, leaving malls and restaurants deserted.