Confirmed cases in Japan grew steadily over the month, but the situation still seems under control. Following global markets with improving confidence on global economic recovery, equity indexes rebounded. The Nikkei 225 Index and the TOPIX Index were up by 6.75% (7.60% in US$ terms) and 4.35% (5.18% in US$ terms) in April.

Japan’s Prime Minister Shinzo Abe warned that even though the 2020 Tokyo Olympics could be delayed to a maximum of 1 year, if the coivid-19 pandemic is still ravaging by then, the delayed Olympics could still be cancelled. The key to effective containment of the virus is most likely via vaccination efforts, but health experts chimed in that the vaccine is likely at least a year to 18 months away, casting doubt over the possibility of holding the Olympics even in 2021.

This is further complicated by the weakening economic fundamentals in Japan, industrial production, exports, and PMI figures are all down for the time being, implying a negative outlook for the economy. To make matters worse, the epidemic response in Japan remains lukewarm and indecisive, government directives have never been compulsory, Abe in particular is criticized for his late reaction to the crisis. At the moment, the state of emergency will be extended until the end of the month, which could further delay the economic recovery.