The coronavirus outbreak is posing myriad challenges for the Japanese economy, including a key Abe administration policy initiative — the promotion of inbound tourism.

In recent years, inbound tourism has been one of the few sectors to see rapid growth in the long-stagnant Japanese economy. Top government officials, especially Chief Cabinet Secretary Yoshihide Suga, have touted the country's "exploding" inbound tourism as a successful example of their "structural reform" deregulation initiatives.

In fact, everything looked to be on track until recently. The number of foreign tourists skyrocketed from 8.36 million in 2012 to 31.88 million in 2019, largely thanks to the yen's depreciation and Suga's initiative to ease Japan's visa conditions for tourists from other Asian countries, most notably China.