Japan

Japan’s industrial output fell for a fourth straight month in May to the lowest level since the global financial crisis and the jobless rate hit a three-year high, underscoring the broad economic pain caused by the coronavirus, Reuters reported. The world’s third-largest economy is bracing for its worst postwar recession, hurt by coronavirus lockdown measures at home and overseas that have upended supply chains, kept businesses shut and depressed consumer spending.

Japanese auto supplier Sanden Holdings on Tuesday said it had filed for debt restructuring with its creditors as falling sales due to the coronavirus pandemic had made it difficult for the company to pursue its restructuring plans, Reuters reported. In a filing to the Tokyo Stock Exchange, the maker of vehicle air conditioning components and compressors said it would enter a so-called alternative dispute resolution, which allows financially stressed companies to reassess and restructure debt.

Tetsuya Kan, head of a major regional bank in Osaka, said it will take two more years for the western Japan prefecture to recover from the damage caused by COVID-19, which has crushed the city’s once thriving tourism and retail sectors, Reuters reported. The vast number of Asian tourists who had flocked to Osaka’s shopping arcades disappeared after Japan banned entry for most overseas visitors, hitting hotels, restaurants and drug stores.

Despite trillions of dollars of stimulus sloshing around and credit being funneled into the global economy, the coronavirus is forcing countless businesses into bankruptcy, Bloomberg News reported in a commentary. The weak are getting weaker, and the big are thrown lifelines. That divide will only grow wider. The case of Japan, where insolvencies are rising sharply, shows that no matter how much cash you have, size matters more: Micro-enterprises across all sectors account for around 70% of companies going under, despite a large portion having net cash.

Japan’s financial regulator is closely watching global credit markets for renewed signs of stress because there’s no guarantee that support measures will keep borrowers afloat during the pandemic, officials said, Bloomberg News reported. Efforts in the U.S. and elsewhere have so far staved off a potential implosion of securities like collateralized loan obligations, which are favored by yield-starved Japanese banks.

Prime Minister Shinzo Abe doubled Japan’s stimulus measures as he looked to deliver on his bold promise to keep businesses and households afloat with the world’s biggest virus-response package, Bloomberg News reported. His cabinet approved Wednesday a 117 trillion yen ($1.1 trillion) set of measures that includes financing help for struggling companies, subsidies to help firms pay rent and several trillion yen for health care assistance and support for local economies.

To truly get an idea of how much the COVID-19 pandemic seems poised to change life in Japan over the next few months or so, just take a few minutes to check out the hundreds of online crowdfunding drives currently in operation nationwide, The Japan Times reported. Campfire, Japan’s largest crowdfunding website, has created a devoted section featuring campaigns that help stores, artists and other institutions in need of financial assistance in the wake of the novel coronavirus outbreak.

The world’s post-coronavirus economic future could depend on mass career migration away from sectors such as retail, entertainment and travel, Japan’s most powerful business leader has warned, the Financial Times reported. Hiroaki Nakanishi, chairman of Hitachi and head of the Keidanren business lobby, told the Financial Times in an interview that propping up businesses during lockdown was not sufficient and governments would need to shift spending away from furloughs towards fundamental economic restructuring.

Japan’s economy sank last quarter into a recession that’s likely to deepen further as households limit spending to essentials and companies cut investment, production and hiring to stay afloat amid the coronavirus pandemic, Bloomberg News reported. Gross domestic product shrank an annualized 3.4% in the three months through March from the previous quarter as exports slid and social distancing crimped consumer spending, Cabinet Office figures showed Monday.

Japan’s Renown Inc, part of Chinese fashion empire Shandong Ruyi, filed for bankruptcy on Friday with 13.9 billion yen ($130 million) in debt, the country’s highest-profile business to collapse amid the coronavirus outbreak, Reuters reported. Renown, a century-old textile company which sells clothes under brands such as Arnold Palmer, Hiroko Koshino and D’Urban, confirmed it had filed for bankruptcy protection after a month-long closure of department stores brought the already-struggling business to its knees. It joins a list of global fashion companies, including retailers such as J.