Japan has one of the most rapidly aging demographics in the world, with close to 28 percent of the population over 65 years old as of 2018. This implies an elevated risk of COVID-19 for the citizens in the country, with the current global death rate sharply increasing for patients over 60. Italy, for example, experienced a comparably higher fatality rate from COVID-19 than China, possibly partly because of a higher proportion of the population over 60 years.
The outbreak may not only have severe ramifications for the health sector, but it also increases fears of an economic recession. The high impact forecast (six months duration of travel bans and a sharp decline in domestic demands) estimated that the global Gross Domestic Product (GDP) would drop by 0.4 percent.
The losses at the Nikkei Stock Average (Nikkei 225) for March 2020 alone were the worst since the Global Financial Crisis in 2008. 151 publicly listed companies in the country reported losses in their sales revenue or net profit since the outbreak of COVID-19. The travel sector is one of the hardest hit, and the Japanese travel Agency H.I.S Co., Ltd., for example, forecasted more than a 90 percent decline in the operation income for the fiscal year 2020 (ending in October) in comparison to the previous year. A large share of business enterprises in the manufacturing industry also reported negative impacts on corporate activities, according to a survey conducted in March 2020.
Additionally on March 24, 2020, the Japanese government announced the postponement of the Tokyo 2020 Summer Olympic and Paralympic Games due to the global pandemic situation. The postponement might significantly increase the cost of the Olympic Games, further adding to the pressure on the nation’s economy.