Is the Covid-19 causing economic recession in Japan?
From my understanding, Japanese economy is largely based on domestic consumption and exports and Japan has never been locked-down like EU or the US.
Has the Covid-19 pandemic been impacted much part of Japanese economy seriously or does it only affect the tourist-related industry?
Would you invest the Japanese stock market rather than the European or the Chinese market?
- 2 months ago
COVID-19 impacted much part of Japanese economy seriously. The tourist-related industry is of course. In addition, many companies shortened operating hours or temporary closure.
My work place also temporary closed since April to May.
- Never-AgainLv 72 months ago
Japan was already tipping into a recession a year ago before the pandemic started. But the pandemic seriously made things even worse. There are a lot of small stores, small restaurants etc in Japan and these had to close up to avoid people congregating together. Many of these are gone and won't be back. The government has been assisting some places (my family owns one restaurant and the local governments paid a subsidy of 80% the monthly revenue for a time) but things are far from normal.
Also one big correction that was erroneously asserted elsewhere - Japan has NOT been in a 20 year recession. In fact periods of recession have been few and short. It has grown, but it has been very anemic and feeble, not seeing 2% growth in GDP in about 7 years. This is in many ways even worse - if there were such a horrible recession, the government would be forced to take decisive action to fix their system. But since it is still weakly growing, they are kicking the can down the road and hoping things just get better without any reform. And with severe and worsening demographic changes underway, there needs to be a near revolutionary change to Japan's insane work culture, as well as how women are treated in society. But since to Japan's bureaucracy "reform" is a four-letter word, they have dragged their feet and engaged in more window dressing than actually fixing the problem.
- thecheapest902Lv 73 months ago
The Japanese government has already acknowledged that the Japanese economy had been in recession since October 2018. So it's already in recession without COVID-19.
But COVID-19 has certainly made it worse. The number of jobs has decreased a lot in this year.
Also, Japan had a sort of lockdown in April and May even though it was not so strict like the ones in the EU and the US.
- TLv 43 months ago
Over the past decade the Japanese tourism industry has relied mostly on Chinese and Korean tourists. They are now gone. The biggest toll is on hotels and related businesses. But in actuality, the biggest percent of job losses is in the manufacturing industry.
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- QuinnLv 63 months ago
Your understanding is incorrect:
1) The Japanese economy has always been largely based on EXPORTS. Japan could never had achieved being a global economic superpower from domestic consumption.
2) Japan had been in a form of lock down in that school were closed and several prefectures were declared state of emergency which gives the prefecture governors the authority to call for people to stay home and close certain businesses. Because of the relatively low cases compared to other developed countries, there were no mandatory nationwide lockdown. But Japan has closed off its borders such that only Japanese citizens and permanent residents with re-entry permits can enter Japan. meaning no tourists.
3) The most important point you missed: Japan has been in a recession for over the last 20 years - long before Covid-19 appeared. And that recession has only worsen by the pandemic. Japan's national debt has skyrocketed such that it has surpassed the US's national debt in terms of relative value.
4) Impact of Covid-19 on Japan was severe. When the pandemic struck, it caused the Japanese economy to suffer the biggest decline since 1980.The only reason the Japanese economy had not imploded is because it was so large that even the devastating hit it took still left a sizeable part intact. But that is not going to last because worldwide consumption of goods is so low that even if the Covid-19 were to be cured today, it would take at least a decade for Japan's economy to right itself.