Japan's economy will take a hit if the Olympic Games are canceled due to the coronavirus outbreak, an analyst said on Friday amid swirling speculation over whether the massive sporting event will take place as scheduled this summer in Tokyo.
The Japanese economy has already been hit by a consumption tax hike that crimped spending and the fallout from the coronavirus pandemic is likely to affect Japanese exporters this year, said Waqas Adenwala, Asia analyst at The Economist Intelligence Unit.
"The Olympics actually is the only silver lining Japan has right now," Adenwala told CNBC.
"The Olympics is the only scenario we can expect some incoming of tourist arrivals, some spending there. It wouldn't have been a big lifesaver, but it would've been some sort of support rather than nothing being there," said Adenwala.
Tokyo has repeatedly reaffirmed its commitment to holding the Olympic Games. Japan's top government spokesman Yoshihide Suga emphasized on Friday that the country is on track to hold the Tokyo 2020 Olympics, after U.S. President Donald Trump suggested a possible delay, Reuters reported.
"I am aware of President Trump's comments, but we are working closely with the IOC (International Olympic Committee), the organizing committee, and Tokyo in preparing for the Games as planned," Suga told reporters, according to Reuters.
Suga was referring to Trump's comments on Thursday, when he said officials should consider postponing the Olympics for a year due to the coronavirus outbreak. On Wednesday, the World Health Organization declared the outbreak of the disease, formally known as COVID-19, a global pandemic.
Trump and Japanese Prime Minister Shinzo Abe had a call on Friday but did not discuss delaying the games or holding them with no spectators, Reuters reported citing senior government spokesman Naoki Okada. They also did not talk about travel restrictions between the two countries, he said.
"The prime minister said firmly that he wanted to win the battle with coronavirus and make this summer's Olympics a success," Okada said in a media briefing after the call, Reuters reported. "President Trump said he thought highly of the effort."
Despite the reassurances, the situation is still fluid amid the public health emergency, said Tobias Harris, a Japan analyst at Teneo Intelligence.
"I don't think anyone really can say with any confidence what the situation is going to be," Harris told CNBC.
A postponement would also involve commercial issues like broadcast rights and the what this could mean for a busy U.S. sports calendar.
"Obviously, you don't want Tokyo to lose the the games entirely. They've spent a lot of money ... (but) it's not just Japan's call," said Harris. "It's not going to be an easy decision for the various people involved."
Disclosure: CNBC parent NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. broadcast rights holder to all Summer and Winter Games through the year 2032.