Japan’s factory output likely slowed in February and retail sales dropped for a fifth straight month, a Reuters poll showed on Friday, as the coronavirus outbreak took an increasing toll on businesses and consumers.
Japan has officially recorded 2,113 cases of the virus and 57 deaths so far as the disease races across the world, prompting the Bank of Japan to expand stimulus while the government works to nail down a support package that sources say will total at least $137 billion.
While the stimulus likely won’t prevent the world’s third-largest economy from sliding into recession, analysts say it could keep businesses afloat until global demand begins to recover.
Industrial output is expected to have inched up 0.1 percent in February from the previous month, the poll of 15 analysts showed, after a revised 1.0 percent gain in January.
“Domestic production activities probably didn’t go as planned due to supply chain disruptions triggered by the coronavirus outbreak,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
“We expect factory output will fall 5 percent in March from the previous month and 2.0 percent in April on worries that declines in global demand will last longer due to the virus impact.”
Next week’s data also include retail sales, which are expected to fall 1.2 percent fall in February from a year earlier, following a 0.4% slip in January.
“Retail sales for March will likely drop further not only in the service industry but also consumptions on other goods as the government called for people to refrain from going out to prevent the spread of the coronavirus,” said Kenta Maruyama, economist at Mitsubishi UFJ Research and Consulting.
The trade ministry will publish both factory output and retail sales at 8:50 a.m. Japan time on Tuesday.
Analysts also expected the unemployment rate to remain unchanged at 2.4 percent in February while the jobs-to-applicants ratio would dip to 1.47, slightly down from 1.49 in January.
The sharp slump in domestic and export demand has raised fears that the jobless rate could rise, analysts said.
The jobs figures will be announced at 8:30 a.m. on Tuesday.
Japan’s economy shrank an annualized 7.1 percent in the fourth quarter of the calendar year and the spread of coronavirus raises fears for another contraction in the current quarter.
The government offered its bleakest assessment on the economy in nearly seven years, saying conditions in March were “severe” as the coronavirus pandemic shut down factories and cooled consumption.