Business sentiment among workers in Japan with jobs sensitive to economic trends fell to the lowest level on record in March due to concern over the ongoing spread of the coronavirus, government data showed Wednesday.
The diffusion index of confidence among "economy watchers" such as taxi drivers and restaurant staff fell 13.2 points from February to 14.2, plunging below levels marked in the wake of the 2008-2009 global financial crisis and the massive earthquake and tsunami in northeastern Japan in 2011.
The Cabinet Office said business sentiment is in an "extremely severe condition," lowering its assessment for the second straight month as the coronavirus outbreak cast a shadow over a wide range of industries.
A worker at an upscale restaurant in the Hokuriku region in northwestern Japan was quoted as saying that business had fallen to about 30 percent of the usual level as most reservations had been canceled.
Another at a travel agency in Kyushu reported a "catastrophic" decline in demand for vacations abroad, while a worker at a transport equipment manufacturer in central Japan's Tokai region said the epidemic was holding up parts orders and causing factory suspensions.
The diffusion index reading of 14.2 was the lowest since comparable data were made available in 2002, diving below the 19.0 marked in December 2008 in the midst of the global financial crisis following the collapse of Lehman Brothers Holdings Inc.
A reading below 50 indicates that more respondents reported worsening conditions rather than improving ones.
The economy watchers had a similarly gloomy outlook, with the diffusion index gauging business sentiment for the coming months falling 5.8 points to 18.8 — also a record low.
Japan's economy is expected to be hit hard after Prime Minister Shinzo Abe on Tuesday declared a state of emergency in Tokyo, Osaka and five other prefectures, enabling local authorities to issue instructions for people to stay at home and ask for the closure of large facilities such as department stores.
"We're seeing a lot of uncertainty regarding when this will all end," a Cabinet Office official told a news briefing. "There's also concern that even if the coronavirus comes under control, demand won't immediately return to where it was."
The Cabinet Office polled 2,050 workers from March 25 to 31, of whom 1,812 or 88.4 percent responded.
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