The government's key composite index of economic indicators in March showing the state of the economy is "worsening" for the first time in more than six years comes amid growing economic concerns as the trade conflict between the United States and China cast dark clouds over global demand. The last time the same description was used was in January 2013 — right after Prime Minister Shinzo Abe returned to the government's helm. Earlier the government claimed that the extended boom cycle on Abe's watch had become the longest in postwar Japan. But the March index is yet another indication that the boom may have stalled and the economy may have entered a downward path — although there are mixed views of the longer-term trend.

Further judgment on the state of the economy aside, the robust demand in overseas markets that has supported Japan's economy over the years appears to be in peril as the bitter Sino-American trade war fuels fears of a slowdown in China, which has curbed Japanese exports to the Chinese market and reduced domestic industrial output. Trade talks between Washington and Beijing broke down last week and both sides have resumed a tit-for-tat exchange of retaliatory tariffs.

As this year's Group of 20 chair, Japan should exercise leadership to defend free trade against protectionist measures and urge the U.S. and China to pursue dialogue to resolve their trade disputes instead of engaging in tariff warfare that benefits no one. At home, the government needs to redouble its efforts to shore up domestic demand as the key engine of growth through structural reforms and deregulation to explore new avenues of growth — given that room for further monetary and fiscal policy measures appears to be narrowing after more than six years of Abenomics.