Restaurants closed in the Shibuya district of Tokyo, January 8. Bars and restaurants are among the companies most affected by the guidelines.
Photographer: Kentaro Takahashi / Bloomberg
Photographer: Kentaro Takahashi / Bloomberg
Japanese Prime Minister Yoshihide Suga appears ready this week to extend the state of emergency to major metropolitan areas that will cause more pain to the economy, while trying to stop record Covid-19 cases and reverse a decline in public support.
In addition, parliament is expected to vote on measures to add teeth to emergency orders on Monday, including fines for bars and restaurants that defy the current voluntary guidelines by 8 p.m.
The emergency covering 11 areas, including Tokyo, Osaka and Nagoya, helped stop the rapid acceleration of virus cases, which reached record levels in early January and raised concerns about the rupture of the world’s oldest population. While the number of infections has fallen since then, the Suga government has said it is still worryingly high.
Suga plans to extend the emergency by about a month after the February 7 deadline and possibly remove Tochigi prefecture from the list as the situation improves there, according to local media. reports. The announcement could appear as early as Monday, the FNN broadcaster said.
Japan’s current measures, which also include the search for people to work from home, are much less stringent and enforceable than the blockades of some European nations. But they have already caused a maritime change, according to economists. Instead of the year starting with a slow recovery, some of them are now seeing a double-digit contraction approaching.
The outbreaks in Japan make Suga look more like a short-term prime minister
The prime minister, who risks being replaced by the ruling party ahead of the October elections, has seen his support dwindle since he took office about four months ago. Critics say his focus on supporting the economy has slowed efforts to stop infections. He now faces expanding business suffering to control the virus, supporting his leadership and keeping him alive. the hope of organizing the Summer Olympics.
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Covid cases in Tokyo began to decline during the emergency
Source: Tokyo Metropolitan Government
“The damage to business would be enormous,” said sushi restaurant owner Mamoru Sugiyama, referring to an extension. Bars and restaurants are among the companies most affected by the guidelines. He has temporarily closed his restaurant, which boasts a 130-year history in Tokyo’s Ginza shopping district.
“Some companies are on the verge of running out of loans and believe that if the emergency continues until February, companies could start collapsing one after another, even in Ginza,” said Sugiyama, who also leads a coalition of about 370 local restaurants and bars.
However, a Nikkei / TV Tokyo poll suggests public support for a longer emergency. The January 29-31 poll showed that 90% of respondents are in favor of an extension.
The government said the emergency could end when the virus crisis moves to stage 3 on a four-stage scale based on six data points.
In Tokyo, that would mean that daily infections fall below 500. Tokyo reported 633 new infections on Sunday, well below the last peak of 2,447 on January 7th. As of January 27, the occupancy rate of the capital’s hospital bed was 73%, and critical care units were at 113% capacity, according to the health ministry. Both numbers should drop below 50% to reach Stage 3.
“We can see that the state of emergency had an impact, but it was too weak,” said Yoshihito Niki, a professor of infectious clinical diseases at Showa University School of Medicine in Tokyo, indicating the need to extend the measures. “The government will have to exercise patience at least until February.”
Commercial arcade on Sanjo Street in Kyoto, January 14th. The government said the emergency could end when the virus crisis moves to stage 3 on a four-stage scale based on six data points.
Photographer: Kosuke Okahara / Bloomberg
Japan’s parliament is due to pass two bills this week, imposing sanctions on those who do not follow official guidelines on the virus. This would include fines of up to 300,000 yen ($ 2,866) for bars and restaurants that do not comply with early closure orders, according to the opposition website of the Democratic Constitutional Party of Japan. A separate infectious disease control act would allow fines of up to 500,000 yen for those with Covid-19 who refuse to be hospitalized or leave before being formally discharged.
Since the declaration of an emergency in early January, economists have warned that less stringent recommendations compared to the first emergency in April are likely to be insufficient and cause more damage over time. This time, the schools remained open and the streets continued to see traffic on the ground, although lower than in normal times, despite repeated calls from officials to stay home.
Toshihiro Nagahama, an economist at the Dai-Ichi Life Research Institute, sees an emergency extended to two months, removing about 3 trillion yen from the economy.
While consensus among analysts is that the economy will shrink by 2.5% annually this quarter, economists Yoshimasa Maruyama and Koya Miyamae of SMBC Nikko Securities Inc. now see a stronger end by 2020, turning into -a contraction of 11.5% in the three months to March. .
However, an unemployment rate of only 2.9% and annual declines in the number of bankruptcies show that spending and loan support from the government and the Bank of Japan have contributed to the cushioning of the economic downturn of the pandemic so far. The Suga administration received a third additional budget through parliament last week, offering another round of aid to companies, medical facilities and the economy.
The next concern is the next period of time in which companies can rely more if the urgency is prolonged and consumer spending remains low.
Yasuhide Yajima, chief economist at the NLI Research Institute, warns that there will be no dramatic revival of growth, even when the emergency situation ends, unless there is more concrete assurance for the public.
“Regardless of the state of emergency, consumption will not return until we see the impact of vaccination,” Yajima said.
– With the assistance of Emi Nobuhiro, Gearoid Reidy, Isabel Reynolds and Toru Fujioka
(It updates the details of the proposed fines, an emergency enlargement survey and GDP forecasts.)