Japan’s economy is set for a deepening recession under the weight of the Covid-19 pandemic. After the annualised 3.4% GDP contraction in the last quarter, the April-June period is forecast to experience a 20%-plus decline — the worst in postwar history — as the full impact of the curb on social and economic activities to contain coronavirus infections sinks in.

The state of emergency declared in early April has since been lifted for much of the country except the greater Tokyo area and Hokkaido, as new infections have dropped to low numbers. Still, the resumption of economic activity is expected to remain slow as concern lingers over second-wave outbreaks and people are urged over the long term to adopt “new lifestyles” designed to avoid human-to-human contact. There are views that it will take a few years before economic activity returns to pre-pandemic levels...

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