People wearing face masks amid concerns over the spread of COVID-19 cross a street in the Ginza shopping district in Tokyo, Japan on Sunday. Photo: AFP

Japan's economy slipped into recession for the first time in four and a half years, putting the nation on course for its deepest postwar slump as the coronavirus crisis ravages businesses and consumers.

Monday's first-quarter GDP data underlined the broadening impact of the outbreak, with exports plunging the most since the devastating March 2011 earthquake as global lockdowns and supply chain disruptions hit shipments of Japanese goods.

Analysts warn of an even bleaker picture for the current quarter as consumption crumbled after the government in April requested citizens to stay home and businesses to close, intensifying the challenge for policymakers battling a once-in-a-century pandemic.

"It's near certainty the economy suffered an even deeper decline in the current quarter," said Yuichi Kodama, chief economist at Meiji Yasuda Research Institute. "Japan has entered a full-blown recession."

The world's third-largest economy contracted an annualized 3.4 percent in the first quarter, preliminary official gross domestic product (GDP) data showed, less than a median market forecast for a 4.6 percent drop.

The slump came on top of an even steeper 7.3 percent decline in the October-December period, with the consecutive quarters of contraction meeting the technical definition of a recession.

The coronavirus has ravaged the global economy as many nations went into strict lockdowns to curb the outbreak that has so far killed over 310,000 people worldwide. The pandemic has been massively disruptive on supply chains and businesses, particularly in trade-reliant nations, such as Japan.

Indeed, the fallout of the virus on corporate Japan was telling with exports diving six percent in the first quarter, the biggest decline since April to June 2011.

The shakeout in global trade was underlined in recent March data, with exports shrinking the most in nearly four years due to plunging US-bound shipments.

Even the nation's major globe-trotting manufacturers weren't spared the pandemic's sweeping impact.

Toyota Motor Corp said on Friday it will cut domestic vehicle production by 122,000 units in June due to a lack of demand. The automaker expects an 80 percent drop in full-year operating profit, lowest in nine years.

Reuters