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By YURI KAGEYAMA, AP Business Writer

TOKYO (AP) — Japanese manufacturers' sentiments have plunged to the lowest level in more than a decade, a quarterly Bank of Japan survey showed Wednesday as the coronavirus pandemic crushes exports and tourism, the mainstays of the nation’s economy.

The headline measure for the “tankan,” tracking sentiment among large manufacturers, fell to minus 34 for April-June, the lowest since 2009, from minus 8 the previous quarter.

The tankan measures corporate sentiment by subtracting the number of companies saying business conditions are negative from those responding they are positive.

That measure has declined for six quarters straight.

Sentiment among large nonmanufacturers fell to minus 17 from plus 8.

Japan was already fighting stagnation before the pandemic began. Tourism has plunged after dramatic increases in recent years, mostly from China and South Korea. Japan has banned travel from more than 100 nations to curb the spread of COVID-19.

Exports have dropped in products such as cars and machinery as overseas consumers hold back on buying. Analysts say recovery will take longer for Japan than for the U.S. or Europe because the world’s third-largest economy depends heavily on exports.

Giant exporters like Toyota Motor Corp. have reported sharp profit falls and aren’t giving fiscal projections because of uncertainty about damage from the outbreak.

The Bank of Japan was providing ample cash in the system to prop up the economy even before the coronavirus hit. The Japanese government, like others around the world, have recently doled out cash handouts to individuals and aid to businesses.


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Palestinians Slash Public Wages in Tax Dispute With Israel Over Annexation

RAMALLAH, West Bank (Reuters) - The Palestinian Authority (PA) said on Thursday it will slash the wages of tens of thousands of its employees after its protest action against Israel's annexation plans in the occupied West Bank deepened a cash crisis.

Its economy already battered by the coronavirus pandemic, the PA, which has limited self-rule in the West Bank under interim peace deals, last month rejected handovers of taxes that Israel collects on its behalf.

The transfers, about $190 million a month, make up more than half of the PA's budget and stem from duties on imports that reach the West Bank and Gaza via Israeli ports. The PA snubbed the taxes after declaring bilateral agreements with Israel null in May.

Awaiting a green light from its U.S. ally and saying more talks with Washington were needed, Israel did not meet its July 1 target date for the start of a cabinet debate on extending sovereignty to the West Bank's Jewish settlements and Jordan Valley.

But the economic impact of the PA's protest against annexation was already being felt.

"Due to the rejection of the tax money and overall decline in income...the state's revenues have declined by 80 percent," Palestinian Finance Minister Shukri Bishara said, also referring to funds lost during the pandemic.

He announced that many of the PA's 132,000 employees would see their wages cut by half, not to fall below a minimum of 1,750 shekels ($507) a month.

Analysts say the health crisis and financial disputes with Israel could drive the PA to financial collapse. After a surge in new coronavirus cases, the PA has placed several West Bank towns under lockdown, which it plans to expand to the entire territory beginning on Friday.

Most PA employees are in the West Bank, with 30,000 in Hamas-run Gaza.

($1 = 3.45 shekels)

(Reporting by Ali Sawafta in Ramallah and Nidal al-Mughrabi in Gaza, Writing by Rami Ayyub, Editing by Jeffrey Heller and Angus MacSwan)

Copyright 2020 Thomson Reuters.

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