TOKYO – “Risks to Japan’s recovery are intensifying.”
So begins the latest Moody’s Investors Service report on the global No. 3 economy as it faces coronavirus infection wave No. 4. The timing could hardly be worse as business and household confidence were beginning to show signs of life.
Confidence among Japan’s biggest manufacturers increased to the highest in more than two years in April amid solid overseas demand for electronics, with many of these shipments heading to China.
At the same time, imports in March beat expectations, jumping 5.7% from a year earlier. To many analysts, it’s a sign that Japan’s economy may have bottomed after an abysmal 2020.
Yet the coming wave of infections is almost certain to stop the recovery in its tracks. Tokyo Governor Yuriko Koike – who has been a firebrand since the pandemic started, and, some would say, an example of leadership that the national government lacks – recommends yet another national state of emergency to contain Covid-19 once and for all.
That strategy, of course, drags its own problems in its wake.