Japan

Japan’s bankers celebrated the end of the 1980s with raucous parties and an all-time high of 38,957 on the Nikkei stock index, the Financial Times reported. It had been a magnificent decade and they all looked forward to another one. The economy had grown by an average of 4 per cent a year and seemed well set to continue on a similar path. By 1995, forecast Nomura Securities, the Nikkei index would hit 63,700. It was a thrilling, golden era. Foreign officials, financiers and journalists rushed to Tokyo. Everyone wanted to learn the lessons of Japan. They still do.

Sixty-year-old Yashiro Haga is folding his Tokyo noodle ramen shop after 15 years in December, unable to overcome the prospect of a lasting customer slump due to the coronavirus crisis, Reuters reported. “The flow of people has changed due to the coronavirus,” Haga said, standing behind the counter of his ground-floor shop, Shirohachi.

Japan's Nissan Motor Co is struggling to revive a fortune that was weakened by scandal and worsened by the COVID-19 pandemic, Reuters reported. The automaker warned in July of a record 470 billion yen (3.36 billion pounds) operating loss for the year to March 2021 and its lowest sales in a decade, as global auto sales slumped. Both Moody’s Investors Service and S&P Global rate Nissan’s debt at Baa3 and BBB-, respectively, one step above non-investment grade. Both agencies have negative outlooks on the debt.

Japan Airlines Co. fell the most on record after saying it will raise as much as 168 billion yen ($1.6 billion) by selling new shares to support its finances during the coronavirus crisis, Bloomberg News reported. The shares dropped over 15% in early trading Monday, the steepest decline on record. They were down 11% at 2:12 p.m. in Tokyo. The stock has plunged more than 50% this year. “Much is still unclear” about the airline’s plans, said Kotaro Toriumi, an independent analyst.

ANA Holdings Inc. forecast its biggest-ever operating loss of 505 billion yen ($4.8 billion) for the fiscal year through March 2021, the latest airline to face an existential threat to its business due to the pandemic, Bloomberg News reported.…The outlook issued by ANA calls for a wider full-year loss than the 376 billion yen analysts were projecting on average, according to estimates compiled by Bloomberg. ANA also forecast 740 billion yen in revenue for the fiscal year through March, compared with analysts’ average prediction for 926 billion yen.

Japan’s banking system remains stable as a whole and has sufficient buffers against risks, the central bank said in a semi-annual report, voicing confidence that domestic financial institutions can withstand the hit from the coronavirus crisis, Reuters reported. But the Bank of Japan warned that commercial banks were vulnerable to various risks including rising credit costs, as loans to pandemic-hit sectors like property developers may sour.

In a related story, Bloomberg News reported that AirAsia Group Bhd. will cease operations in Japan immediately as it tries to reduce cash burn amid the coronavirus outbreak that’s wiped out travel demand globally. AirAsia Japan has stopped operations as of Monday, Southeast Asia’s second-biggest budget carrier said in a statement. That will help the parent conserve cash. Further steps on the decision will be made in accordance with applicable laws and regulations including the Japan Civil Aeronautics Act, it said.

Nearly 36,000 Japanese companies have chosen to discontinue their business so far this year, mainly due to the hit from the coronavirus crisis and up sharply from a year ago in a sign of the pain the pandemic is inflicting on the fragile economy, Reuters reported. The total number of companies closing businesses, without going through bankruptcy procedures, may top 53,000 by year-end. That would be the most since relevant data became available in 2000, Tokyo Shoko Research said on Wednesday.

After more than three centuries in business, the Onuma department store in northern Japanese city of Yamagata began bankruptcy proceedings this year - one of many distinguished department stores across the country in dire straits, Reuters reported. Known for fancy food halls, luxury items, impeccable service and, in their heyday, rooftop attractions to entertain families, Japan’s department stores have been in a long slow decline as shopping habits change. Now the coronavirus pandemic, just as it has forced U.S.

Japan’s economy shrank by 7.8 percent in the second quarter of the year, posting its worst performance on record as the coronavirus pandemic ground economic activity to a near halt in April and May, the International New York Times reported. The nosedive in output in the three-month period — an annualized drop of 27.8 percent — was the third straight quarter of contraction for Japan, the world’s third-largest economy after the United States and China.