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V-shaped recovery hopes fading fast in Asia

TOKYO – Japan just added Yoshihide Suga’s scalp to the bill for a fast-worsening economy.

Dramatic as Prime Minister Suga’s September 3 resignation was, similar shockwaves are being felt around the globe. Japan’s export-led economy is as good a weathervane as any for the Covid-19 headwinds bearing down on the global recovery.

The Delta variant is steadily undoing hopes that “V-shaped” recoveries would rev up factories, offices and schools and restore business and household confidence. Where we are now is as good as it is going to get for the global economy in the last four months of 2021 and the start of 2022.

The abrupt slowdown in US employment growth in August – adding 235,000 jobs, well south of the expected 720,000 – is far more troubling than Japan’s data misses. So are the signs emanating from China, where manufacturing has been stalling.