Welcome to Nikkei Asian Preview.
Cities around the world besieged by the coronavirus may find some hope this week as Wuhan — the Chinese city that was the initial epicenter of the coronavirus — lifts its lockdown. But if the experience of other Chinese cities is any guide, it may be a while before shoppers return to malls and stores.
In Japan, the coronavirus impact on retail appears to have been more mixed. The nation’s largest retailers will report results this week for most recent quarter, when the country saw a steep drop in inbound tourists that hurt business. But for Japan’s convenience stores and supermarkets, sales actually rose in February, as consumers stocked up on daily necessities and food in anticipation of a Wuhan-style lockdown, according to government data.
Also this week, two Asia-Pacific central banks are also scheduled to meet to address the pandemic’s far-reaching economic consequences.
Keep up with our reporting by following us on Twitter @NAR.
Japan adopts $500 billion stimulus package
Prime Minister Shinzo Abe and his cabinet are expected on Tuesday to approve a new stimulus package worth 56 trillion yen ($502 billion) to combat the pandemic’s economic impact. The package will include support for the aviation, travel, and restaurant industries, where demand has dropped sharply, as well as providing 300,000 yen to households that have seen a drop in their income.
Singapore shutdown starts
Although Singapore authorities have avoided using the term “lockdown,” the monthlong closure of schools and workplaces in the city-state begins Tuesday. All businesses will close except essential services such as supermarkets, hospitals and transport.
“We have decided that instead of tightening incrementally over the next few weeks, we should make a decisive move now, to pre-empt escalating infections,” Prime Minister Lee Hsien Loong said in a televised message last week.
Read more: Singapore’s “circuit breaker” measures to rein in infections
Australia central bank meets
Australia’s cash rate has been slashed by 125 basis points over the last 12 months. Another cut in March brought the rate to a record low 0.25%, but Australia’s central bank has already ruled out negative interest rates ahead of its next board meeting on Tuesday, saying that interest rates had reached their “effective lower bound.”
Chips a bright spot as Samsung reports 1Q earnings
Samsung Electronics will announce tentative figures for revenue and operating profit from the first quarter. Smartphone sales are expected to have dropped sharply during the January-March period due to the coronavirus outbreak squeezing consumers’ wallets.
But its memory chip segment may have weathered the crisis — CEO Kim Ki-nam said at last month’s annual shareholder meeting that demand for DRAM and NAND chips is still robust.
Wuhan lockdown ends
Wuhan’s complete lockdown will end on Wednesday, marking a total of 76 days of home quarantine endured by the city’s 11 million population in an effort to curb the coronavirus.
The control measures, which were initially criticized by skeptics as inhumane but later adopted by many countries, may have prevented 700,000 new cases, scientists estimate. Official statistics show that more than 2,500 people have died in Wuhan, representing about 75% of the country’s coronavirus fatalities.
The lockdown’s end comes as concerns rise about a second wave of the epidemic.
China releases March price indexes
More economic data on the Chinese economy is expected on Wednesday after last week’s surprising manufacturing activities data. The release of the consumer and producer price indexes will give more clues as to how the world’s second-largest economy fared in March and the first quarter of 2020.
Inflation remained elevated at 5.2% in February, partly due to food costs escalated by quarantine measures, but they have since been eased gradually with work resumption rate crossing 90% nationwide.
South Korean central bank meets
The Bank of Korea’s monetary policy board will meet on Thursday to decide the benchmark rate, after cutting it by 50 basis points to a record low of 0.75% last month. The financial services company Societe Generale expects the BOK to make another cut by 25 basis points to 0.5% this week.
Fast Retailing, Seven & i report 2Q earnings
Japanese fashion house Fast Retailing, which owns Uniqlo, will announce second quarter results from December to February on Thursday. The company started closing some of its stores in China as early as January, and now more stores are shuttered in countries such as the U.S. and Indonesia.
Seven & i Holdings, which operates 7-Eleven convenience stores, department stores and supermarkets, will also announce results on Thursday. This will be followed by department store operator J. Front Retailing and shopping mall operator Aeon on Friday.