Answer:
apanese manufacturers are falling behind because they rely on foreign demand. According to Deloitte Insights, exports and manufacturing production are highly correlated in Japan. "In May, manufactured goods exports fell 23.8% from a year earlier, while manufacturing production was down 25.9% over the same period," said Deloitte.4 Unfortunately, the pickup in global demand that Japanese manufacturers so desperately need seems unlikely any time soon.
Tourism is a large part of the Japanese economy, but this industry has also been hit hard as the pandemic keeps foreign visitors away.
The outlook for Japanese international trade is influenced by a wave of protectionism that risks lowering global trade volumes. There are also heightened geopolitical tensions that further threaten Japanese exports and foreign direct investments.
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