Toshihiro Nagahama, chief economist at the Dai-ichi Life Research Institute, has asked the Government to reduce consumption tax from 10 per cent to eight on all products until the economy goes back to normal, reports to Kyodo News.

The coronavirus outbreak has slowed exports and threatens the world economy.

According to 34 economists surveyed by the Japan Center for Economic Research, Japan's GDP is set to plummet by 2.9 per cent in the first quarter of the year due to the coronavirus pandemic.

While Prime Minister Shinzō Abe has been among those adamant the Olympic and Paralympic Games will go ahead as planned this summer, calls from elsewhere to postpone the event because of the coronavirus crisis are growing.

Abe hopes the Games will lead to a tourism boost, but that too is threatened by the pandemic.

Should the Games be postponed - or even worse, cancelled - there would be a severe impact on the economy, analysts warn.

"If it's cancelled, the damage would be immeasurable," Nagahama said.

"This could also deteriorate public sentiment significantly."

Japan has more than 1,000 confirmed COVID-19 cases to date, and there have been more than 310,000 globally, but a state of emergency in Hokkaido, where the Olympic marathons will be run in Sapporo, was recently lifted.