Japan’s new car sales fell in January, boosting signs that the economy could shrink in the current quarter due to supply chain problems and rising Omicron cases.
The prolonged effects of the virus hit the BoJ’s hopes that the world’s third-largest economy will lead to a resounding recovery after the pandemic.
Domestic sales of new cars fell 14.2% in January from a year earlier, falling for the seventh month, which was higher than -11.4% in December.
The increase in cases has led some spare parts manufacturers to stop production, causing production disruptions and delays in deliveries to major automakers such as Toyota Motor.
“Demand is stable, but supply constraints are likely to affect sales from February onwards,” said Yoshimasa Maruyama, chief economist at SMBC Nikko Securities.
The ominous outlook for production reinforces uncertainty about Japan’s economic recovery, which is already threatened by restrictions imposed in some areas to deal with the pandemic.
Consumer confidence fell in January for a second month as Omicron’s spread hit buyers.
Source: Capital
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