The third straight quarter of declines knocked the size of real gross domestic product (GDP) to decade-low levels, wiping out the benefits brought by Prime Minister Abe Shinzo ‘s ‘Abenomics’ stimulus policies deployed in late 2012, Reuters reported.

While the economy is emerging from the doldrums after lockdowns were lifted in late May, many analysts expect any rebound in the current quarter to be modest as a renewed rise in infections keep consumers’ purse-strings tight.

“The big decline can be explained by the decrease in consumption and exports,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

“I expect growth to turn positive in the July-September quarter. But globally, the rebound is sluggish everywhere except for China.”

The world’s third-largest economy shrank an annualized 27.8 percent in April-June, government data showed on Monday, marking the biggest decline since comparable data became available in 1980 and slightly bigger than a median market forecast for a 27.2 percent drop.

While the contraction was smaller than a 32.9 percent decrease in the United States, it was much bigger than a 17.8 percent fall Japan suffered in the first quarter of 2009, when the collapse of Lehman Brothers jolted global financial markets.

The size of Japan’s real GDP shrank to 485 trillion yen, the lowest since April-June 2011 when Japan was still suffering from two decades of deflation and economic stagnation.

The main culprit behind the dismal reading was private consumption, which plunged a record 8.2 percent as lock-down measures to prevent the spread of the virus kept consumers at home.

External demand — or exports minus imports — shaved a record 3.0 percentage point off GDP, as overseas shipments plunged 18.5 percent, with auto exports hit particularly hard.

Falling global vehicle sales have hurt automakers like Mazda Motor Corp. and Nissan Motor Co., among the biggest drivers of Japan’s economy, and their parts suppliers.

Capital expenditure declined 1.5 percent in the second quarter, less than a median market forecast for a 4.2 percent fall, as solid software investment made up for weak spending in other sectors.

Economy Minister Yasutoshi Nishimura conceded the GDP readings were ‘pretty severe’, but pointed to some bright spots such as a recent pickup in consumption.

“We hope to do our utmost to push Japan’s economy, which likely bottomed out in April and May, back to a recovery path driven by domestic demand,” he told a news conference.

Japan has deployed massive fiscal and monetary stimulus to cushion the blow from the pandemic, which hit an economy already reeling from last year’s sales tax hike and the US-China trade war.

While the economy has re-opened after the government lifted the state of emergency measures in late May, a worrying resurgence in infections clouds the outlook for business and household spending.

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Abe announced the lifting of the emergency in 39 of Japan’s 47 prefectures, as the country strives to balance the damage to the economy from prolonged shutdowns and the need to stem the spread of the coronavirus, Reuters reported.

But he said the biggest urban centers of Tokyo and Osaka will remain under restrictions until there is a convincing containment of the new coronavirus.

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“If the US is honest amid the conditions caused by the coronavirus and intend to take a measure (in Iran’s favor), the only way is for them to lift the illegal sanctions on Iran,” Rouhani said in a telephone conversation with the Japanese premier, Abe Shinzo, on Tuesday.

The president also expressed gratitude to Japan for providing Iran with humanitarian aids amid the coronavirus pandemic, saying, “Unfortunately, the US’ illegal sanctions against the Iranian nation have intensified in the tough conditions of the fight against the coronavirus and its severe economic consequences.”

The US’ cruel sanctions have even obstructed Iran’s efforts to obtain medical supplies and foodstuff, Rouhani deplored.

He further called for collective efforts to reduce regional and international tensions, adding, “It is unfortunate that we have witnessed the creation of tensions by the US in Iraq and the Persian Gulf region, (and indeed) regional tensions have always been triggered by the US.”

The two heads of state further stressed the need for mutual cooperation in the battle with COVID-19 and for sharing the experiences in containing the disease.

Abe expressed concern about the continuation of tensions in the Middle East, hailed Iran as a major and influential country in establishing regional peace and calm, and said, “Tokyo will keep efforts and cooperation with Tehran in this regard.”

The Japanese leader also deplored an intensification of the US sanctions on Iran amid the coronavirus outbreak, stressing that humanitarian measures should be on the agenda of all countries in the current situation.

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The International Olympic Committee and the Japanese government last month postponed the Games until July 2021 because of the coronavirus crisis.

With the epidemic’s worldwide infection rate climbing and experts suggesting a vaccine is a long way off, doubts have been raised about the chances of holding the huge event next year.

“We’ve been saying the Olympic and Paralympic Games must be held in a complete form, in that athletes and spectators can all participate safely. It would be impossible to hold the Games in such a complete form unless the coronavirus pandemic is contained,” Abe said in response to an opposition lawmaker, Reuters reported.

Abe staked part of his legacy as Japan’s longest-serving premier on holding the Games and was hoping for a boom in tourism and consumer spending. Japan gathered some $3 billion in domestic sponsorship, an Olympic record, and spent close to $13 billion on preparations.

The prime minister said on Wednesday that the Olympics “must be held in a way that shows the world has won its battle against the coronavirus pandemic,” and cautioned that Japan should “brace for a protracted battle”.

Tokyo confirmed 47 new infections on Wednesday, private broadcaster Nippon Television reported. The national tally stands at 13,895 infections, including 413 deaths, national broadcaster NHK said.

While that tally is still low compared to other nations, critics say Japan is not doing enough testing to reveal the scope of a problem that has driven some hospitals to the brink.

Reflecting that view, Tokyo governor Yuriko Koike told reporters that the situation in the Japanese capital remained “difficult” and called on Abe’s cabinet to extend the nationwide emergency, which is due to end on May 6.

Abe’s comments echoed statements made by other senior Japanese officials this week.

Tokyo 2020 president Yoshiro Mori told Nikkan Sports on Tuesday that the Games would be “scrapped” if they could not take place in 2021. Also on Tuesday, the head of the Japan Medical Association (JMA), Yoshitake Yokokura, told a news briefing that “unless an effective vaccine is developed, I expect hosting the Olympics will be difficult”.

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The nationwide call for citizens of Japan to stay home in the evenings follows the declaration of a state of emergency in Tokyo and six other prefectures last week, Reuters reported.

Abe has been gradually tightening guidance, seeking to lessen the impact on the economy as it is hammered by the pandemic, leading to criticism that he has been too slow to act and risks having the virus spread out of control.

Tokyo, the current center of Japan’s coronavirus outbreak, identified more than 190 new coronavirus cases on Saturday, topping Friday’s record high of 189 cases, NHK said.

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Abe will announce the plan as soon as Monday, with the formal declaration for the Tokyo area coming as early as Tuesday, the Yomiuri newspaper reported, without attribution. Osaka is also likely to be included, while Hyogo, Saitama, and Hokkaido prefectures are under consideration, according to Kyodo News and other media reports. Japan’s biggest-ever stimulus package worth 60 trillion yen (US$550 billion) may also be announced on Tuesday.

Abe is expected to call a meeting of his advisory panel on the virus before announcing the decision. The state of emergency will be issued for specific areas and a time period will be set.

Abe’s government saw its approval rating slip to its lowest since Oct 2018 in a poll from broadcaster JNN released on Monday with a majority of respondents faulting the way the government has managed the virus crisis. The poll taken on April 4-5 showed that about 80 percent of respondents said the declaration should be made, Bloomberg reported.

While Abe’s government has said the country is on the brink of an explosive surge, it has resisted calls to declare an emergency. The governors of Tokyo and Osaka have been pushing for the declaration as the recent spike in cases sparked concerns Japan is headed for a crisis on the levels seen in the US and several countries in Europe.

Declaring a state of emergency hands powers to local governments, including to urge residents to stay at home. By contrast with some other countries though, there is no legal power to enforce such requests due to civil liberties protections in Japanese law.

While Japan was one of the first countries outside of the original epicenter in neighboring China to confirm a coronavirus infection, it has fared better than most, with about 3,150 reported cases as of Monday – a jump from less than 500 just a month ago. That’s the lowest tally of any Group of Seven countries, although Japan might be finding fewer mild cases because it has conducted a relatively small number of tests.

Last week, the US Embassy in Tokyo advised American citizens to return home, saying Japan’s low testing rate makes it hard to accurately assess the prevalence of the virus. The Japan Medical Association warned last week that the jump in cases in the nation’s most populous cities is putting more pressure on medical resources and that the government should declare a state of emergency.

Tokyo reported 143 new coronavirus infections on Sunday, its largest single-day tally. It marked the second straight day the city’s daily infection tally exceeded 100.

Tokyo Governor Yuriko Koike is already pressing residents to avoid unnecessary outings, and television showed many of the capital’s main shopping areas almost deserted over the weekend. The Tokyo local government is set to begin leasing hotels this week to accommodate mild cases, to make room in its hospitals for the seriously ill.

Abe told parliament on Friday that the situation didn’t yet warrant an emergency declaration, but said he wouldn’t hesitate to take the step if the time comes.

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Olympics Minister Seiko Hashimoto said organizers are not considering canceling the Olympics, which start on July 24.

“We in Japan, will keep in close contact with everybody, including the International Olympic Committee and the World Health Organization, to take appropriate steps and keep the virus from affecting the Olympics,” Abe told a parliamentary committee, Reuters reported.

The death toll from the coronavirus epidemic in China rose to 361 on Monday and a growing number of countries are reporting cases. Japan has 20 confirmed cases, 17 of which were people who had been to China or are Chinese.

On the other hand, the Philippines Department of Health said a 44-year-old man from Wuhan city in central Hubei province, the epicentre of the outbreak, had died after developing severe pneumonia. It was the first death out of more than 130 cases reported in around two dozen other countries and regions outside of mainland China.

The man who died was a companion of a 38-year-old Chinese woman, also from Wuhan, who was the first and only other person to test positive for the virus in the Philippines. Both patients arrived in the Philippines via Hong Kong on Jan. 21.

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“Step-by-step, the agreements, which we reached with Russian President [Vladimir] Putin are being implemented,” Abe said. “Former residents of the [Southern Kuril] Islands go on a pilgrimage tour by plane to their relatives’ graves and joint economic activity is being cultivated on the four islands.”

“We will speed up talks based on the 1956 Joint Declaration, solve the territorial problem and sign a peace treaty,” Abe said. “We are moving towards this without any hesitation. I’m fully determined to achieve this goal together with President (Vladimir Putin),” he stressed, TASS reported.

Russia and Japan have been in talks to sign a peace treaty since the mid-20th century. The main stumbling block to achieving this is the ownership issue over the Southern Kuril Islands, called the Northern Territories in Japan. After the end of World War II, the Kuril Islands were incorporated into the Soviet Union. However, the ownership of Iturup, Kunashir, Shikotan Islands and the Habomai Islands has been challenged by Japan. The Russian Foreign Ministry has repeatedly said that Russia’s sovereignty over these islands, which is committed to paper in international documents, cannot be called in question.

In November 2018, Putin and Abe held a meeting on the sidelines of the ASEAN summit in Singapore and agreed that the two countries would accelerate the pace of the peace negotiations based on the 1956 Joint Declaration. The declaration ended the state of war and said that the Soviet government was ready to hand Shikotan Island and a group of small islands called Habomai over to Japan on condition that Tokyo would take control of them once a peace treaty was signed.

In May 2019, Russian Foreign Minister Sergey Lavrov highlighted that the document clearly said that the border issue could be only considered after signing a peace treaty.

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TEHRAN (Iran News) – Japanese Prime Minister Abe Shinzo warned that military conflict with Iran will affect global peace and stability, as he visited the Middle East in the hope of easing tensions spiked by the recent US assassination of a top Iranian general.

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