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Reuters reports that “Japanese business confidence plunged to fresh decade lows in April as firms reported widespread damage from the coronavirus pandemic which is threatening to throw the world economy into recession, the Reuters Tankan survey showed on Thursday.”

Key notes

  • Reuters Tankan: Japan business mood plummets to fresh decade lows on coronavirus woes.
  • Reuters Tankan: Japan manufacturers index -30 in April vs -20 in March.
  • Reuters Tankan manufacturers’ index hits lowest level since Oct 2009.
  • Reuters Tankan: Japan non-manufacturers index -23 in April vs -10 in March.
  • Reuters Tankan: Non-manufacturers’ index drops to lowest level since Feb 2010.
  • Reuters Tankan: Japan manufacturers July index seen at -47, non-manufacturers -44.
     

The global spread of the highly contagious virus has caused entire regions to be placed on lockdown, upended supply chains and halted services and production around the world.

The poll showed both manufacturers and service-sector firms in Japan expected to see a further sharp deterioration in business sentiment in the three months ahead.

The weak business confidence could deal a hard blow to capital spending, one of the few bright spots in the world’s third-largest economy, likely raising calls on the government to roll out more supportive measures.

Reuters reports that the economy is expected to have already slipped into recession due to the worsening COVID-19 pandemic, following a slump in the final quarter of 2019. It is perhaps a time where the dollar will shine again as other competitors fall behind as well and its safe-haven appeal encourages outflows from the yen and a receding economy.

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