Japan prepares for sharpest economic downturn, virus crisis tests policy response

Japan’s economy braced for its sharpest postwar inactivity even as first-quarter gross domestic product fared better than initially speculated. This is mainly from the disruptions of the coronavirus crisis, halting global growth and pressuring Tokyo to alleviate businesses and consumers from economic drag.

Banks are doing their part in helping as lending soared at its most rapid pace on record in May. This indicated that companies were resorting to loans to meet urgent funding needs in a bid to salvage suffering sales.

The world’s third-biggest economy had declined an annualized 2.2% in the first quarter, revised data showed on Monday. The figure came way smaller than the 3.4% contraction rate in a preliminary reading as capital expenditure advanced. Moreover, economic analysts rendered a 2.1% contraction.