Japan’s regional economies in very severe situation: Finance Ministry

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Japan’s regional economies have been worsening rapidly and are in an “extremely severe situation” as the novel coronavirus takes its toll, the Finance Ministry said, the dimmest language it has used since the inception of its quarterly report in 2001.

The ministry downgraded its overall assessment for the 11 regions for the first time since October 2012. It had said in January that while there was some weakness in manufacturing activity, the economies were “recovering.”

It noted that the coronavirus had caused a sharp fall in household spending and ate into overseas demand for Japanese exports.

The quarterly report was released after Prime Minister Shinzo Abe earlier this month declared a nationwide state of emergency, calling on people to stay at home as much as possible.

The report usually comes after a meeting of the heads of the ministry’s regional bureaus, but the gathering was called off amid concerns over the virus spread.

All 11 bureaus downgraded their individual assessments, with the Kanto region, including Tokyo, seeing a decline in spending at hotels, restaurants and department stores.

In the Tokai region, home to Toyota Motor Corp, there was a “sharp fall” in production, while the number of tourists fell sharply in Okinawa.

Looking forward, all bureaus voiced concerns over the impact of the coronavirus.

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