Many Japanese have been shunning "retail therapy."
This slowdown in shopping has contributed to Japan suffering a sharp economic reversal.
Bloomberg provides additional details in this March 8 article excerpt:
Japan's economy contracted last quarter more than initially estimated, underscoring its vulnerability even before the coronavirus threatened to push the country into recession.
Gross domestic product shrank an annualized 7.1 percent from the previous quarter in the three months through December, as consumers slashed spending after a hike in the sales tax and businesses cut investment the most since the global financial crisis.
For the economy as a whole, it was the sharpest contraction since a previous tax increase in 2014, revised data from the Cabinet Office showed Monday. Analysts projected a 6.6 percent decline. The government's initial estimate was a 6.3 percent drop.
The coronavirus has snuffed out any hope of an economic rebound early this year following the fourth quarter's largely tax-triggered slump. The epidemic's impact has spread from exports and supply chains to something that's also hitting domestic consumption, the tourism industry and investment.
A growing number of analysts see the economy shrinking more than 2 percent again this quarter, a problem for Prime Minister Shinzo Abe, who already unveiled a stimulus package late last year. The prime minister is expected Tuesday to give details on new emergency economic measures, but it's unclear what can be done to stoke growth amid an epidemic that is keeping shoppers home.
Yes, Japan's economy began to shrink before the coronavirus became big news.
The same thing happened with other global economies, as Elliott Wave International's monthly Global Market Perspective emphasized in the March issue:
In Germany, the world's fourth largest economy, year-over-year GDP growth fell to 0% in the fourth quarter of 2019. In December, Germany's contraction was clearly accelerating, as industrial production fell 6.8% from December 2018. A report confirmed, "Europe's largest economy was stagnating even before the coronavirus outbreak began." The coronavirus will undoubtedly figure into the economic contraction, because Germany is heavily reliant on Chinese supply chains, as are many other countries.
Then, of course, there's China, the world's second-largest economy. The February issue of the [Elliott Wave Financial Forecast] discussed evidence showing "that China's economy was well on its way to a hard landing long before the virus emerged in December." On March 2, The Wall Street Journal reported that the latest economic numbers depict an outright "freeze" that dates to late January. Automobile sales tell the story. According to China's Passenger Car Association, they fell 80% in February. The latest reports from Chinese purchasing managers tell a similar tale. According to the National Bureau of Statistics, the Chinese Purchasing Managers Index contracted to 35.7 from 50.0 in January, "below even the lowest level recorded during the global financial crisis," says the Journal. The services PMI contracted even further, to 29.6, "suggesting weakness in construction, transportation, restaurants and tourism."
The Chinese government says that the coronavirus is now contained and that the economic impact will be minimal, but pocketbook indicators disagree. Suddenly, deflation is a very real part of everyday life for many Chinese.
And, speaking of deflation, Elliott Wave International's analysts encourage you to learn all you can about this topic so you can prepare for what they see ahead.
You may want to start with the free report, "What You Need to Know Now About Protecting Yourself from Deflation."