The Bank of Japan (BOJ) cut its assessment of all nine of the nation’s regions in its quarterly “Sakura” report on local economies.
It was the first time since 2009 that the BOJ downgraded every region at once, another sign of the widespread damage the COVID-19 pandemic is doing to Japan and other countries.
Hours earlier BOJ Governor Haruhiko Kuroda sounded the alarm in a speech to the bank’s branch managers.
Photo: Reuters / Kyodo
“The spreading novel coronavirus is having a serious impact on our economy,” he told them, citing across-the-board weakness in exports, tourism, consumer spending and factory production. “The economic outlook is extremely uncertain.”
Responding to the recent jump in the nation’s infection numbers, Japanese Prime Minister Shinzo Abe this week was forced to declare a state of emergency for Tokyo, Osaka and prefectures, which together generate half of the nation’s economic output.
The governor of Aichi Prefecture yesterday called on the prime minister to add his province to the list of those in crisis.
“All nine regions revised down their assessments from the previous ones in January 2020, due mainly to the impact of the outbreak of the novel coronavirus and reported that their economy had been weak or facing strong downward pressure,” the BOJ said in its survey.
One respondent working at a Kyoto hotel said the number of visitors to the city was down sharply. The virus has hit the regional tourism industry harder than the global financial crisis, the person said.
Another person at a machinery maker on the island of Kyushu said business was being hampered by trouble in the supply chain.
The flow of parts from China still had not recovered, the person said, even though factories on the mainland are getting back to work.
The Bank of Japan next meets on April 27 and 28, when it is due to update quarterly economic projections.
The forecasts are likely to be dire, unless the BOJ skips making them as the US Federal Reserve did last month. Private sector economists now see Japan’s economy shrinking more than 10 percent this quarter.
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