* Japan's service sector shrinks at record pace in April
* Australia's PMI survey also shows slump in service activity
* South Korea's economy suffers biggest contraction since 2008
* European flash PMIs expected to show worsening sector declines
By Leika Kihara
TOKYO, April 23 (Reuters) - The coronavirus pandemic battered Asian economies in April with social-distancing policies and business closures taking a particularly heavy toll on the region's service sector firms, surveys showed on Thursday.
The outbreak, which has infected more than 2.5 million and killed about 180,000 globally, has also continued to cripple manufacturing, shutting down factories and upending supply chains across the export-heavy region. economic woes, seen in flash purchasing managers' indexes on Thursday, are likely to be echoed in other parts of the world with similar surveys from major European economies, such as Britain and Germany, expected to show massive contractions in their factory and services sectors.
Collapsing service sector activity presents a major concern for governments given the millions employed by banks, retailers and hospitality firms, and the threat rising unemployment poses to social stability.
Japan's services sector PMI shrank at a record pace in April, as retailers took a hit from government requests for citizens to stay home and shops to close or operate at shorter hours than usual.
"The current state of emergency will stay in place until 6 May," said Joe Hayes, economist at IHS Markit, which compiles the survey.
"Given Japan's lagged response relative to other parts of the world, one would expect this to be extended, meaning the harsh economic effects are likely to drag out further."
The gloomy data comes ahead of the Bank of Japan's policy meeting next week, at which the central bank is set to sharply cut its growth forecasts and take further steps to ease corporate funding strains. au Jibun Bank Flash Japan Services PMI plunged to 22.8, marking the lowest reading since the start of the services sector survey in September 2007. Its factory PMI fell to 43.7, its lowest since April 2009. pain was similar in Australia where the IHS Markit Flash Services PMI slumped to a record low 19.6. The Australia Flash Manufacturing PMI fell to 45.6 in April from 49.7 in March.
Separate data on Thursday showed South Korea's trade-reliant economy, Asia's fourth-largest, shrank at its fastest pace since 2008 as self-containment measures kept shops closed and slumping global demand hurt exports. International Monetary Fund said last week Asia's economic growth this year will grind to a halt for the first time in 60 years as the health crisis takes an "unprecedented" toll on the region's service sector. China, which is starting up again much earlier than other countries, will see its economy recover only slowly from its first quarterly contraction since current records began, according to a Reuters poll. will continue to suffer the economic cost of voluntary business shutdowns. Prime Minister Shinzo Abe announced a state of emergency on April 7 for seven prefectures including Tokyo.
He expanded the emergency nationwide on April 16 as the pandemic spread. The government is expected to decide during its Golden Week holiday between April 29 and May 6 whether to extend the emergency - a move many analysts see as a near certainty given the steady increase in the number of infections.