Business mood in Japan plunges

TOKYO • Japanese business confidence plunged to decade lows in March as the coronavirus outbreak stoked fears of a global recession and sent stock markets tumbling, the Reuters Tankan survey showed Tuesday.

The monthly poll suggested the Bank of Japan’s tankan quarterly survey due April 1 will show a sharp deterioration in business sentiment both at manufacturers and non-manufacturers.

The global spread of the virus has hammered world trade, supply chains and tourism, dealing a heavy blow to Japan’s fragile economy.

The souring business mood could derail capital spending, one of the few bright spots in the Japanese economy. That will heap pressure to deploy more stimulus measures.

The BOJ eased monetary policy on Monday by pledging to buy riskier assets such as exchange-traded funds (ETFs) at double the current pace, joining global central banks in combating the widening economic fallout from the pandemic.

All manufacturers across industries were pessimistic about business conditions, according to the Reuters poll of 501 large- and mid-sized nonfinancial companies, of which 242 firms responded on condition of anonymity.

Among service sector firms, no firms except those in real estate/construction and information/communications were optimistic.

Japan’s economy, the world’s third-largest, shrank at a 7.1-per-cent annualized rate in October-December, and many economists see another contraction in the current period, which would spell a technical recession.