Corona Virus Japan Update
As of late March, Japan had a total of 1,905 cases of the Corona Virus – including 712 cases from the Diamond Princess cruise liner. The nation recorded 53 related deaths thus far. Currently, there are 15 clusters of patients nationwide: with concentrations in Osaka, Hokkaido, Aichi and Tokyo. While new cases appear daily, cases have not reportedly surged thanks to widespread adherence to social distancing and the use of precautionary measures. Prime Minister Abe has not yet called for a State of Emergency with containment measures appearing to be effective. Japan’s schools remain closed, as do major sporting and entertainment venues. Employers nationwide have widely employed telework and flex time measures since early March.
The economic impacts are only starting to be felt, but they are expected to be severe. In February, imports from China plunged 47% as factory shipments dried up. By Mid March, the Nikkei 225 Stock Index fell 30% from 24,000 to the 17,000 level since the beginning of the year. Excluding toilet paper, consumer confidence has plunged as has tourism. Japan is now thought to be in a recession. Supplementary budgets are being tapped to provide emergency medical services, and the government is preparing a new spending package to mitigate the expected downturn. Elements being considered include a reduction in the consumption tax, tax relief for at-risk families and financial assistance to pay utility bills. The Bank of Japan has also taken steps to increase liquidity and boost asset purchases; however, with a negative 0.1% lending rate, the BOJ effectively has no further room to lower interest rates without impairing the profitability of the financial sector. The Japan Seatbelt Manufacturers Association has issued an advisory to “strap on your seatbelts as this wild ride is just getting started”!