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| Japan’s Economy Shrank Sharply. Now Comes the Coronavirus. | Japan’s Economy Shrank Sharply. Now Comes the Coronavirus. |
| (7 days later) | |
| TOKYO — Japan’s economy has already been staggered by a devastating typhoon and a wallet-shutting tax increase. Now, the coronavirus that has brought business in neighboring China to a virtual standstill threatens to knock Japan into a full-blown recession. | TOKYO — Japan’s economy has already been staggered by a devastating typhoon and a wallet-shutting tax increase. Now, the coronavirus that has brought business in neighboring China to a virtual standstill threatens to knock Japan into a full-blown recession. |
| Japan said on Monday that its economy had shrunk at an annualized rate of 6.3 percent in the three months that ended in December, the worst contraction since mid-2014. The results predated the virus epidemic but were affected by a monthslong slump in Chinese demand for Japanese exports. | Japan said on Monday that its economy had shrunk at an annualized rate of 6.3 percent in the three months that ended in December, the worst contraction since mid-2014. The results predated the virus epidemic but were affected by a monthslong slump in Chinese demand for Japanese exports. |
| Officials had been optimistic that an easing of the effects of Typhoon Hagibis and the consumption tax increase would return the country to growth as the new year began. But then the coronavirus began its deadly spread in China, halting the lucrative flow of tourists from that country and further imperiling Japanese exports. | Officials had been optimistic that an easing of the effects of Typhoon Hagibis and the consumption tax increase would return the country to growth as the new year began. But then the coronavirus began its deadly spread in China, halting the lucrative flow of tourists from that country and further imperiling Japanese exports. |
| If Japan’s economy — the world’s third largest after the United States and China — shrinks again in the first quarter of 2020, the country will officially fall into recession for the first time since a brief dip in 2015. A recession is generally defined as two straight quarterly contractions. | If Japan’s economy — the world’s third largest after the United States and China — shrinks again in the first quarter of 2020, the country will officially fall into recession for the first time since a brief dip in 2015. A recession is generally defined as two straight quarterly contractions. |
| It’s unclear how long the virus outbreak will continue, but the entire global economy could suffer from a prolonged shock in China, and some economists are already predicting slower growth for the year. The virus’s ripple effects are hitting Japan particularly hard: China is its largest trading partner and by far its biggest source of visitors, many of whom come ready to shop. | It’s unclear how long the virus outbreak will continue, but the entire global economy could suffer from a prolonged shock in China, and some economists are already predicting slower growth for the year. The virus’s ripple effects are hitting Japan particularly hard: China is its largest trading partner and by far its biggest source of visitors, many of whom come ready to shop. |
| The spread of the coronavirus inside Japan itself also presents a wild card. The country has had the most confirmed cases outside China, with more than 400, including those from a cruise ship quarantined in Yokohama. Last week, Japan recorded its first death from the virus. | The spread of the coronavirus inside Japan itself also presents a wild card. The country has had the most confirmed cases outside China, with more than 400, including those from a cruise ship quarantined in Yokohama. Last week, Japan recorded its first death from the virus. |
| But China’s ban on group travel as it tries to contain the outbreak is the more immediate economic threat to Japan. The effects can already be seen in places like Shun Natori’s sweets shop in what is normally one of Tokyo’s busiest tourist districts. | But China’s ban on group travel as it tries to contain the outbreak is the more immediate economic threat to Japan. The effects can already be seen in places like Shun Natori’s sweets shop in what is normally one of Tokyo’s busiest tourist districts. |
| The Lunar New Year holiday is high season for Chinese tourism to Japan, but the small streets and alleys surrounding Mr. Natori’s business have been unusually quiet for weeks. The nearby Sensoji temple — famous for its enormous red lanterns and throngs of selfie-taking tourists — is nearly empty. | The Lunar New Year holiday is high season for Chinese tourism to Japan, but the small streets and alleys surrounding Mr. Natori’s business have been unusually quiet for weeks. The nearby Sensoji temple — famous for its enormous red lanterns and throngs of selfie-taking tourists — is nearly empty. |
| The last time things were this slow, Mr. Natori said, was in March 2011, after an earthquake and tsunami caused a nuclear meltdown, scaring tourists away from Japan for months. | The last time things were this slow, Mr. Natori said, was in March 2011, after an earthquake and tsunami caused a nuclear meltdown, scaring tourists away from Japan for months. |
| “The best thing would be if things get busy again,” he said. | “The best thing would be if things get busy again,” he said. |
| That seems unlikely to happen soon. At least 400,000 travelers from China are expected to cancel trips through March, according to data from the Japan Association of Travel Agents. Japanese airlines have suspended flights as demand has plummeted. | That seems unlikely to happen soon. At least 400,000 travelers from China are expected to cancel trips through March, according to data from the Japan Association of Travel Agents. Japanese airlines have suspended flights as demand has plummeted. |
| Officials have begun to express concern about the outbreak’s effect on their country’s fragile economy, which in recent quarters had defied gloomy projections and eked out modest growth even as sales of Japanese goods and services abroad continued to decline. | Officials have begun to express concern about the outbreak’s effect on their country’s fragile economy, which in recent quarters had defied gloomy projections and eked out modest growth even as sales of Japanese goods and services abroad continued to decline. |
| Japan is “starting to see a large impact on the tourist industry and regional small and medium-size enterprises,” Prime Minister Shinzo Abe recently told lawmakers. | Japan is “starting to see a large impact on the tourist industry and regional small and medium-size enterprises,” Prime Minister Shinzo Abe recently told lawmakers. |
| Japan on Friday announced a limited $96 million package of emergency funds that will be used in part to help businesses struggling because of the outbreak. That followed the government’s approval of a $120 billion stimulus package late last year, an economic injection that came as Japan tried to stave off recession after the tax increase and the typhoon. | Japan on Friday announced a limited $96 million package of emergency funds that will be used in part to help businesses struggling because of the outbreak. That followed the government’s approval of a $120 billion stimulus package late last year, an economic injection that came as Japan tried to stave off recession after the tax increase and the typhoon. |
| The country’s consumption tax was raised to 10 percent from 8 percent in October, a move that officials said was necessary to support expanded public services as the population rapidly ages and pay down the national debt, the highest among developed nations. But it has also depressed consumer spending. | The country’s consumption tax was raised to 10 percent from 8 percent in October, a move that officials said was necessary to support expanded public services as the population rapidly ages and pay down the national debt, the highest among developed nations. But it has also depressed consumer spending. |
| Days after the tax increase went into effect, Typhoon Hagibis slammed into Japan, battering its main island, causing enormous damage and further suppressing economic activity. | Days after the tax increase went into effect, Typhoon Hagibis slammed into Japan, battering its main island, causing enormous damage and further suppressing economic activity. |
| As Japan has recovered from the storm, its industrial output rose slightly in December. But now the coronavirus poses a serious threat to a crucial market for the goods being produced. Japanese manufacturers are major suppliers to Chinese companies, sending them everything from precision machine tools to components for smartphones and cars. | As Japan has recovered from the storm, its industrial output rose slightly in December. But now the coronavirus poses a serious threat to a crucial market for the goods being produced. Japanese manufacturers are major suppliers to Chinese companies, sending them everything from precision machine tools to components for smartphones and cars. |
| Even before the outbreak, Japanese companies were struggling to cope with the effects of China’s economic slowdown, a result in part of its trade war with the United States. Japanese exports to China were down 7.6 percent in 2019 from the previous year. | Even before the outbreak, Japanese companies were struggling to cope with the effects of China’s economic slowdown, a result in part of its trade war with the United States. Japanese exports to China were down 7.6 percent in 2019 from the previous year. |
| Updated June 30, 2020 | |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | |
| Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. | Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. |
| A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. | A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. |
| The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. | The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. |
| The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. | The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| The epidemic has also affected operations of Japanese companies inside China. In response to the virus, the Chinese authorities extended the Lunar New Year holiday, effectively shutting down manufacturing work for many Japanese companies. | The epidemic has also affected operations of Japanese companies inside China. In response to the virus, the Chinese authorities extended the Lunar New Year holiday, effectively shutting down manufacturing work for many Japanese companies. |
| The toymaker Tomy lowered its earnings estimates for the end of the financial year, which closes March 31, because of a slowdown in production in China, Japan’s national broadcaster, NHK, reported. Nintendo has said it will delay shipments of its Switch console to Japanese consumers as a result of the outbreak. | The toymaker Tomy lowered its earnings estimates for the end of the financial year, which closes March 31, because of a slowdown in production in China, Japan’s national broadcaster, NHK, reported. Nintendo has said it will delay shipments of its Switch console to Japanese consumers as a result of the outbreak. |
| Addressing investors this month, Hiroki Totoki, a top executive at Sony, warned that the outbreak could have a “major impact on our supply chain, logistics and sales,” potentially erasing a projected increase in earnings growth. | Addressing investors this month, Hiroki Totoki, a top executive at Sony, warned that the outbreak could have a “major impact on our supply chain, logistics and sales,” potentially erasing a projected increase in earnings growth. |
| But perhaps no businesses in Japan are feeling the effects of the epidemic as much as those dependent on tourism, which has grown significantly in importance to the Japanese economy in recent years. The number of visitors to Japan has more than tripled over the last decade, reaching 31 million in 2018, according to government statistics. | But perhaps no businesses in Japan are feeling the effects of the epidemic as much as those dependent on tourism, which has grown significantly in importance to the Japanese economy in recent years. The number of visitors to Japan has more than tripled over the last decade, reaching 31 million in 2018, according to government statistics. |
| More than 30 percent of those visitors came from China — almost nine in 10 for vacation — making the country the largest source of tourists to Japan. | More than 30 percent of those visitors came from China — almost nine in 10 for vacation — making the country the largest source of tourists to Japan. |
| While visitors from South Korea and Taiwan — second and third in Japan’s tourism rankings — spend most of their money on sightseeing, Chinese travelers tend to shop. | While visitors from South Korea and Taiwan — second and third in Japan’s tourism rankings — spend most of their money on sightseeing, Chinese travelers tend to shop. |
| Busloads of Chinese bargain hunters — leery of high taxes and knockoff products at home — descend on Tokyo’s upscale shopping districts to buy foreign and domestic goods in a flurry of consumption known in Japan as bakugai, or “explosive shopping.” | Busloads of Chinese bargain hunters — leery of high taxes and knockoff products at home — descend on Tokyo’s upscale shopping districts to buy foreign and domestic goods in a flurry of consumption known in Japan as bakugai, or “explosive shopping.” |
| By propping up domestic consumption as Japan’s population declines, visitors from China make an outsize contribution to the country’s bottom line. | By propping up domestic consumption as Japan’s population declines, visitors from China make an outsize contribution to the country’s bottom line. |
| “If you look at consumption patterns of Chinese visitors to Japan, a lot of people are buying things like makeup,” said Keiji Kanda, a senior economist at the Daiwa Institute of Research, adding that “places like department stores and drugstores are likely to be heavily impacted.” | “If you look at consumption patterns of Chinese visitors to Japan, a lot of people are buying things like makeup,” said Keiji Kanda, a senior economist at the Daiwa Institute of Research, adding that “places like department stores and drugstores are likely to be heavily impacted.” |
| Some hope, though, could be around the corner. Mr. Natori, who owns the sweets shop near the Sensoji temple, said he was looking forward to the cherry blossom season, when tourism usually booms. | Some hope, though, could be around the corner. Mr. Natori, who owns the sweets shop near the Sensoji temple, said he was looking forward to the cherry blossom season, when tourism usually booms. |
| In anticipation of that, he plans to use the downtime to “think up a seasonal menu.” | In anticipation of that, he plans to use the downtime to “think up a seasonal menu.” |
| Makiko Inoue contributed reporting. | Makiko Inoue contributed reporting. |