The coronavirus outbreak caused a key index of the current state of the economy to fall in March by the biggest margin in nine years, government data showed Tuesday.
The coincident index of business conditions fell 4.9 points from February to 90.5 against the 2015 base of 100, the Cabinet Office said, the steepest drop since March 2011 when the Tohoku was devastated by the Great East Japan Earthquake and tsunami.
The office maintained its assessment that economic conditions are "worsening" as factory production and household spending slowed.
The data reflected the situation before Prime Minister Shinzo Abe placed the nation under a state of emergency in April, asking people to stay at home and for shops to temporarily close in a bid to reduce face-to-face interactions, meaning the index will likely fall further before any rebound.
The leading index of business conditions, which forecasts the situation in the coming months, plummeted 8.1 points to 83.8, the steepest drop since officials began compiling comparable data in 1985.
The Japanese economy has been hit hard by the coronavirus, with economists expecting gross domestic product in the January-March period to have shrank for the second consecutive quarter. The Cabinet Office will release GDP figures next Monday.
The government has drawn up a ¥25.69 trillion extra budget focusing on ¥100,000 cash handouts per person and supporting beleaguered small businesses, and Abe has indicated that more stimulus could be on the way.