Weak private spending extended to its fourth month in Japan’s struggling economy after a sales tax hike and unusually warm winter kept people from spending. Adding the recent virus outbreak, firms latch on to measures to keep business up.
Japan has implemented measures to soften the impact on production and exports caused by global health crisis, which is endangering the country to recession.
Commodity spending dropped 3.9% year-on-year in January, closely hitting the 4.0% estimated decline.
The steep decline was suggestive of stricter spending among households even before the virus broke out.
The CODIV-19 has threatened to subdue domestic-led economic recovery in Japan, which policymakers had hoped for following the quickest fall in almost six years.
January commodity spending was down 1.6%, caused by weak gasoline spending and both domestic and overseas travel.
The Bank of Japan may raise measures to aid companies hit by the virus and avoid financial squeeze before the end of March.
BOJ Governor Haruhiko Kuroda said that the virus could hit hard on the economy, suggesting that policymakers are concerned of its larger potential risks.
Japan’s economy declined by 6.3% in the October-December period caused by the sales tax hike and business and consumer spending.
Japan car sales drop by 38% last month due to the coronavirus pandemic29.06.2020
Airbus to cut production by 40% in two years due to the coronavirus pandemic29.06.2020
Japan retail sales slump as pandemic curbs consumer spending26.06.2020
Dollar holds safe-haven bid amid virus resurgence