By Leika Kihara
TOKYO, April 17 (Reuters) - Japan's exports likely slumped the most in over 3-1/2 years in March as the coronavirus pandemic crushed demand in the United States and Europe, a Reuters poll showed, heightening the chance of recession for the world's third-largest economy.
The poll also showed annual core consumer inflation likely slowed to 0.4% in March, in a sign that plunging oil prices and soft domestic demand will keep price growth distant from the Bank of Japan's 2% target.
With more than 9,000 infections and nearly 200 deaths nationally, Prime Minister Shinzo Abe on Thursday expanded a state of emergency to include the entire country, urging people to stay home and businesses to close.
The widening fallout from the pandemic has added pressure to an economy already on the cusp of recession, with service-sector confidence slumping to a historic low.
Finance ministry data is expected to show exports fell 10.1% in March from a year earlier after a 1.0% drop in February, according to analysts polled by Reuters.
That would be the biggest drop since a 10.3% fall in October 2016, according to the ministry.
Imports are projected to fall 9.8% in March, after plunging 13.9% in February as supply chain disruptions in China hit Japanese manufacturers reliant on parts shipped from the country.
"The spread of the virus will weigh on global output by disrupting supply chains worldwide, causing sharp declines in both Japanese exports and imports," said Kenta Maruyama, an economist at Mitsubishi UFJ Research and Consulting.
"With no sign the virus will be contained soon, global flow of goods and people will stagnate for the time being."
The trade balance data will be released at 8:50 a.m. Monday (2350 GMT Sunday).
Other data will likely show Japan's core consumer prices, which excludes volatile fresh food prices but includes oil costs, likely rose 0.4% in March from a year earlier after a 0.6% increase in February, the poll showed.
"Demand for daily necessities like face masks and toilet paper remains strong. But consumption of other goods are soft overall due to souring household sentiment," said Takeshi Minami, chief economist at Norinchukin Research Institute.
The government will release the consumer price data at 8:30 a.m. Friday (2330GMT Thursday).
(Reporting by Leika Kihara, additional reporting by Daniel Leussink; Editing by Kim Coghill)
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