Japan Braces for Recession as GDP Plummets and Virus Fears Linger

The 6.3 percent drop in GDP is nearly double the estimates, fuelling concerns of deep economic malaise

Euro, Hong Kong dollar, U.S. dollar, Japanese yen, pound, and Chinese 100 yuan banknotes are seen in this picture illustration on Jan. 21, 2016. Jason Lee/Illustration/Reuters

Japan’s economy, which on Monday registered a contraction of minus 6.3 percent in its quarterly annualized gross domestic product (GDP) number, risks tipping into a full-blown recession as the outsized impact of a recent sales tax—and now coronavirus fears—drag on economic activity.

The figures (pdf), released by Japan’s Cabinet Office, represent the seasonally-adjusted, quarter-over-quarter, nominal growth rate, commonly known as QoQ SAAR GDP. For the 2019 October-December period, this number fell by a huge 6.3 percent, nearly double the 3.7 percent drop anticipated by markets.