Coronavirus: Bank of Japan cuts economic assessment of all country's regions

The Bank of Japan next meets April 27-28, when it is due to update quarterly economic projections.
The Bank of Japan next meets April 27-28, when it is due to update quarterly economic projections.PHOTO: REUTERS

TOKYO (BLOOMBERG) - The Bank of Japan cut its assessment of all 9 of the country'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 coronavirus is doing to Japan and other countries.

Hours earlier Governor Haruhiko Kuroda sounded the alarm in a speech to the bank's branch managers.

"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 Japan's infection numbers, Prime Minister Shinzo Abe this week was forced to declare a state of emergency for Tokyo, Osaka and prefectures that together generate half of the country's economic output.

On Thursday (April 9), the governor of Aichi prefecture called on Abe 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 hadn't recovered, the person said, even though factories in the mainland are getting back to work.

 
 
 

The Bank of Japan next meets April 27-28, when it is due to update quarterly economic projections. The forecasts are likely to be dire, unless the BOJ skips making them as the Federal Reserve did last month. Private sector economists now see Japan's economy shrinking more than 10 per cent this quarter.