Japan’s economy minister Yasutoshi Nishimura has cautioned that corporate profits and factory production in the nation could be impacted by the recent coronavirus outbreak. Concerns about potential economic impact of the virus are keeping global financial markets on edge, as markets worry about economic growth slowing down in China.

While addressing a news conference earlier today, Nishimura stated, “There are concerns over the impact to the global economy from the spread of infection in China, transportation disruptions, cancellation of group tours from China and an extension in the Lunar Holiday.”

China is one of Japan’s key trading partners and its economy is extremely reliant on exports. Japan’s economy has experienced strain lately over the continued US-China trade war, but the BOJ had recently upgraded its economic growth forecasts for this year following the signing of the phase one trade deal.

Almost 30% of tourists visiting Japan come from China, accounting for nearly 40% of income from foreign tourism. With travel advisories and lockdowns in place as China fights to contain the spread of the virus, Japan’s exports, retail sector and tourism are likely to be hit during the festive Chinese New Year holiday season.