(C) Reuters. A man works at a factory at the Keihin industrial zone in Kawasaki
TOKYO (Reuters) – Japan’s factory output and retail sales likely fell at the fastest pace in years in April as the coronavirus outbreak hurt the world’s third-largest economy, a Reuters poll found on Friday.
Foreign and domestic demand for Japanese goods has collapsed amid virus lockdowns and supply chain disruptions, adding to views that the economy sank deeper into recession in the current quarter.
Industrial output was expected to fall 5.1% in April from the previous month, the biggest drop since comparable data became available in 2013, the poll of 15 analysts showed on Friday, following a 3.7% decline in March.
“The government issued the emergency status in April due the expansion of the coronavirus impact and overseas economic activity stagnated, which likely pushed down productions of durable goods and capital goods,” said Yusuke Shimoda, senior economist at Japan Research Institute.
Retail sales likely fell 11.5% in April from a year earlier, the fastest pace of decline since March 1998, after a revised 4.7 decline in March.
The government urged people to refrain from going out to prevent the virus’ spread, and department stores and other shops scaled down or temporarily closed their businesses, which damaged retail sales, analysts said.
The trade ministry will announce both factory output and retail sales at 8:50 a.m. Japan time on Friday, May 29 (2350 GMT Thursday).
Japan’s jobless rate was seen rising to 2.7% in April from 2.5% in March and the jobs-to-applicants ratio slipped to 1.33 from 1.39, according to the poll.
“Business conditions worsened significantly in areas such as accommodation, transportation, restaurant and entertainment. Labour demand has also receded,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
Other data is expected to show that Tokyo’s core consumer price (CPI) index, which includes oil products but excludes fresh food prices, likely fell 0.2% in May from a 0.1% slip in April, after oil prices fell and the coronavirus impact pushed down prices, especially in the service sector, analysts said.
The jobs data and the Tokyo core CPI will be released at 8:30 a.m. on Friday.
The economy slipped into recession for the first time in 4-1/2 years in the last quarter, putting the nation on course for its deepest postwar slump.
Japan factory output, retail sales seen falling more sharply in April: Reuters poll
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