Japan’s soaring COVID-19 cases cloud GDP gains

Significance

Output has regained pre-pandemic levels, but remains below its earlier 2019 peak. However, the future looks uncertain as a COVID-19 resurgence turns the 'great reopening' into a nasty 'reclosing'. Japan’s current high infection and death rates are now above those in the United States.

Impacts

• Japan’s very success in limiting infections has curbed wider community immunity.
• Despite the current surge, Japan's COVID-19 infections and deaths will remain well below those in Western countries overall.
• Higher energy and food prices driven by global shortages due to the Ukraine war will take their toll on consumers, along with a weak yen.
• It will be several months before Japan’s tourism industry returns to anything resembling its historically normal business volume.