How the Coronavirus Crisis Affected Japanese Industries: Evidence from the Stock Market

Author Name Willem THORBECKE (Senior Fellow, RIETI)
Creation Date/NO. June 2020 20-E-061
Download / Links


The COVID-19 Crisis has buffeted the Japanese economy. To investigate how industries have been impacted this paper examines the response of sectoral stock returns. The machinery sector has suffered due to its exposure to the macroeconomy. Real estate and tourism have been harmed not by macroeconomic influences but by factors such as the voluntary lockdown and the travel restrictions. Sectors related to health, entertainment, and delivery services gained not because of the macroeconomic environment but because of idiosyncratic advantages. For those sectors such as machinery harmed by macroeconomic factors, the strongest impact has come from the Japanese economy itself rather than the world economy, exchange rates, or oil prices. These findings imply that nurturing the Japanese economy is key to helping Japanese firms recover.

Forthcoming: Thorbecke, Willem. "Japanese economic performance after the pandemic: A sectoral analysis," Journal of Risk and Financial Management.