Tourism and Investment in Japan

Japan restarts economic activities cautiously under “ New normal” lifestyle On May 25, the Japanese government finally has lifted the state of emergency for the entire country including Tokyo. Daily new infections have been trending down and the government decided to lift about 50 days long emergency.  The first step for “new normal” aiming to contain the virus while revitalize economic and social activities has been started. However, it will take long time until the economy returns to pre-outbreak level. Japan’s economy needs long period of time to come back to life The national statistics showed that Japanese economy has already been dented to unprecedented degree. The Cabinet Office announced on May 18 that the preliminary GDP forecast for January to March 2020 was minus 0.9% from the previous quarter, and minus 3.4% on an annualized basis at seasonally adjusted value in real terms excluding the effect of price changes. It was the second consecutive quarter of negativ...

COVID-19 pushed down Japan’s industrial production in March The Ministry of Economy, Trade and Industry announced on April 30 that the industrial production index for March was 95.8, down 3.7% from the previous month. It was the lowest level since January 2013. Corporate activities stagnated due to the spread of new coronavirus infections.  The production for March was pushed down because some factories stopped operations to adjust production volume. Production fell in a wide range of industries including the automobile industry and chemical industry. Production index fell in 13 industries out of 15.  The shipment index fell 5.0% to 94.0, the first drop in four months. It is the lowest level since 2013, when comparable data is available. Shipments for export were influenced by the infections and declined in 14 industries such as the automobile industry and the manufacturing machinery industry including semiconductor manufacturing equipment.  The inventory index i...

COVID-19 has left tourist spots deserted Although Japan is in the middle of the Golden Week, a stretch of Japanese holidays, popular tourist destinations around the country are eerily quiet with people refraining from going out to contain COVID-19, the new coronavirus.  Restaurants in tourist areas are heavily hit because they can't continue operating as they were. Even at the very popular tourist spots usually so crowded that the shoulders would be touched each other during the Golden Week, there are few tourists now visiting.  Although there are locals who enjoy jogging and walking, most restaurants and souvenir shops have closed with shutters down. The lodging industry is also at stake. Last month, a hotel management company went into a large scale bankruptcy with a total debt of about 16 billion yen.  Due to such a sharp drop in travel demand, travel companies are forced to halt their businesses. Major travel companies such as JTB and HIS are temporarily...

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...

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 ...

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 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 th...