JAPAN

摘要

Covid-19 cases have ballooned in Japan, with Prime Minister Yoshihide Suga announcing a month-long state of emergency for Tokyo (which saw a record for new infections on December 31) and neighbouring regions on January 8. This was extended to other major hubs on January 13-14, along with a ban on foreign nationals entering the country. With workers encouraged to stay at home and limit their movements, consumer activity is likely to be significantly dented. Consumption was already faltering at the end of last year amid concerns about the second wave and tighter restrictions across the globe at that time. Japanese retail sales fell by -2.0% (m-o-m) in November, compared with a +0.5% gain in October, and physical retail spaces reported declines in the number of shoppers. By contrast, the Bank of Japan's Consumption Activity Index (CAI) for November recorded a fourth straight month of increase (of +0.6% m-o-m), thanks to spending on durable goods. Services spending grew also but was already moderating at this point. Our panel's forecast for private consumption in 2021 has ebbed from +2.6% in December to +2.0%.