The Latest: Report: Japan's economy to shrink by record 25%

The Associated Press
Posted 4/9/20

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The Latest: Report: Japan's economy to shrink by record 25%

Posted

The Latest on the coronavirus pandemic. The new coronavirus causes mild or moderate symptoms for most people. For some, especially older adults and people with existing health problems, it can cause more severe illness or death.

TOP OF THE HOUR:

— Japan's economy headed to record 25% contraction, according to Goldman Sachs

— Hostess bars, night clubs, discos in Seoul shut down amid concerns over virus transmissions.

— Japan PM Abe urges cooperation with state of emergency in six prefectures

— Approximately 65,000 leave Wuhan as 11-week lockdown ends

— Venezuela president orders all infected with coronavirus to be hospitaized

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TOKYO — Japan’s economy is headed to a record 25% contraction in the current quarter, even with the just announced government fiscal aid package, as the new coronavirus slams consumer spending and business growth, Goldman Sachs said Wednesday.

The dismal report by economists Naohiko Baba and Yuriko Tanaka said exports are expected to dive by 60% in the April-June period.

The contraction for the world’s third largest economy would be a record, since GDP, or gross domestic product, began to be tracked in 1955, according to the report.

The measures in Japan to curtail the spread of the pandemic don’t carry penalties, and public transportation continues to run. The declaration of a state of emergency centers around requests to work from home, and for department stores, restaurants and events to shut down. Grocery stores and banks remain open.

The report says the declaration “will meaningfully change the behavior of individuals, business owners and event organizers.”

The government announced a 108 trillion yen ($1 trillion) rescue package, but the report estimates the perk to GDP will total only 14 trillion yen ($130 billion), from the cash handouts to needy families and monetary help to small businesses.

The report doesn’t take a view on the outbreak’s future. But it says Japan’s economic activity will likely recover with the third quarter as overseas economies pick up and will “gradually normalize” next year, picking up with the postponed Olympics held in the summer. Japan’s GDP is expected to grow 3.1% in 2021, it said.

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SEOUL, South Korea --- The South Korean capital of Seoul has shut down more than 400 hostess bars, night clubs and discos amid concerns over coronavirus transmissions.

The measures announced by Mayor Park Won-soon on Wednesday came a day after two female bar employees were found to have contracted the coronavirus after one of them contacted a pop-star customer who also tested positive, triggering public calls for stronger controls on entertainment venues.

Park says the temporary gathering bans imposed on the 422 venues through April 19 will shut down all such businesses in the city for now as 1,700 others had already closed or suspended operations under the city’s anti-virus recommendations.

Park says officials have placed 118 of the bar employees’ contacts under self-quarantine and are testing them for COVID-19. So far, 18 of them have tested negative.

The singer, Yoon Hak, of the K-pop boy band Supernova, had visited the southern Seoul bar in late March before testing positive on April 1.

South Korea’s government has shut schools and issued social-distancing guidelines for the public to slow the spread of the virus, but has not enforced lockdowns or broad business closures.

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TOKYO — Japan’s Prime Minister Shinzo Abe repeated his request to the people to stay home and cooperate Wednesday, the day after he declared a monthlong state of emergency to Tokyo and six other prefectures.

The measure allows Tokyo Gov. Yuriko Koike and her counterparts in six prefectures to issue stricter requests to the residents to stay home and businesses and organizations to shut down, though there will be no penalties to violators.

“I hear many company workers are switching to working from home. Only your cooperation can allow us to get out of the state of emergency in a month,” Abe said. He asked everyone to reduce interactions with people by up to 80%.

Abe has been criticized for being too slow to take significant steps over concerns about the Tokyo Olympics and a possibility of a severe economic impact from social distancing measures. Abe said Tuesday he took the measure as a surge of untraceable cases has made Japan’s strategy of cluster analysis difficult and medical systems were facing a risk of collapsing

Japan’s health ministry on Wednesday, said 351 new cases were reported from around the country, bringing the national total of the virus infections to 4,257 with 81 deaths. Tokyo alone had 80 cases for a prefectural total of 1,196.

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SEOUL, South Korea — South Korea plans to take further steps to tighten border controls to slow coronavirus infections imported from abroad as outbreaks worsen in Europe and the United States.

South Korean Prime Minister Chung Sye-kyun during an anti-virus meeting on Wednesday said Seoul will suspend visa-free entries and visa waivers with countries imposing entry bans on South Korean nationals and employ further restrictions to repel foreigners traveling on “unnecessary and non-urgent purposes.”

Officials were expected to formally announce the measures later Wednesday.

South Korea has been enforcing two-week quarantines on all passengers arriving from abroad since April 1.

South Korea’s Centers for Disease Control and Prevention on Wednesday reported 53 new cases of the coronavirus and 8 more deaths, bringing national totals to 10,384 infections and 200 fatalities.

At least 832 infections have been linked to passengers arriving from abroad, with most of the cases detected in the past three weeks in the densely populous Seoul metropolitan area, where about half of South Korea’s 51 million people live.

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BEIJING — Within hours of China lifting an 11-week lockdown on the central city of Wuhan early Wednesday, roughly 65,000 people had left the city by train and plane alone, according to local media reports.

Highways, bridges and tunnels were also opened, allowing thousands of more to exit by car and bus, as long as they were able to show a mandatory smartphone application powered by a mix of data-tracking and government surveillance shows they are healthy and have not been in recent contact with anyone confirmed to have the virus.

Despite the new freedom, many prevention measures remain in force in the city and those leaving Wuhan — the epicenter of the global pandemic — face numerous hurdles when arriving at their destinations elsewhere. That includes being required to undergo 14-day quarantines and submit to nucleic acid tests.

China on Wednesday reported 62 new virus cases, 59 of them brought from outside the country, and two additional deaths.

The country where the virus first emerged now has recorded 3,333 deaths and 81,802 total cases, with 1,190 people remaining in treatment, 189 in serious condition. Another 83 suspected cases and 1,095 people who have tested positive but show no symptoms remain under isolation and monitoring.

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CARACAS, Venezuela — Venezuela’s President Nicolás Maduro has ordered anybody sick with the new coronavirus to be hospitalized in a measure aimed at stopping the illness from spreading.

Maduro said Tuesday he fears that people can too easily catch the illness from relatives living together. Until now, patients showing mild symptoms were mostly told to stay at home in isolation.

So far officials in Maduro’s government have confirmed 166 cases with seven deaths.

The first cases of the virus were announced in mid-March, and Maduro quickly ordered the entire nation to stay home on quarantine. Schools were closed and international flights suspended.

Medical workers fear the coronavirus could spread in the crisis-stricken nation with many hospitals lacking basics like soap and water.

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