Japan’s factory activity shrinks at fastest pace as domestic and overseas demand slump

Japan’s factory activity contracted at a record pace since March 2009 amid a virus-hit economy that led to a sharp decline of domestic and overseas demand.

Its Manufacturing Purchasing Managers’ Index (PMI) fell from a final 47.8 to a seasonally adjusted 44.8 in February. This was observed as the lowest in a decade when Japan was hit by a devastating tsunami.

Recent major exports also declined as the coronavirus pandemic caused panic and disruption among several key trading partners in neighboring areas.

A central bank survey on Wednesday showed that manufacturing outlook turned sour for the first time in seven years, further piling on the pressure on the nation’s policymakers.

Japan’s economy also shrank in the last quarter which was a result of a previous tax hike and the U.S.-China trade war which placed the world’s third-largest economy near a recession.