Closed restaurants in Tokyo’s Shibuya area, Jan. Bars and eateries are among the businesses most affected by the guidelines.
Photographer: Kentaro Takahashi / Bloomberg
Photographer: Kentaro Takahashi / Bloomberg
Japanese Prime Minister Yoshihide Suga appears poised this week to extend the state of emergency for major metropolises that will hurt the economy even more as he tries to halt the record of Covid-19 cases and reverse a drop in public support to make.
Additionally, parliament is expected to vote on measures to add teeth to the emergency warrants as early as Monday, including fines for bars and restaurants that defy current voluntary guidelines to close before 8pm.
The emergency in 11 areas, including Tokyo, Osaka and Nagoya, helped halt a rapid acceleration of virus cases, which hit records in early January and raised concerns about breaking through the oldest population of the developed world. While the number of infections has since fallen, Suga’s government has said they are still worryingly high.
Suga plans to extend the emergency by about a month after the February 7 deadline and the possible removal of Tochigi prefecture from the list as the situation improves there, according to local media. reports. The announcement could come as early as Monday, said broadcaster FNN.
Japan’s current measures, including the search for people to work from home, are much less strict and enforceable than the lockdown of some European countries. But they have already caused a turnaround, according to economists. Instead of starting the year with a slowing recovery, some of them are now seeing a double-digit contraction looming.
Outbreaks in Japan make Suga look more like a short-term prime minister
The prime minister, who is at risk of being replaced by the ruling party ahead of an election due in October, has seen his support wane since taking office about four months ago. Critics argue that his focus on supporting the economy has slowed down efforts to stop infections. Now he is facing a growing need for companies to contain the virus, strengthen his leadership and the hope of holding the Olympics in the summer.
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Covid cases in Tokyo are starting to decline during emergencies
Source: Tokyo Metropolitan Government
“The damage to businesses would be enormous,” said Mamoru Sugiyama, owner of the sushi restaurant, referring to an extension. Bars and eateries are among the businesses most affected by the guidelines. He has temporarily closed his restaurant, which has a history of 130 years, in the upscale Ginza shopping district in Tokyo.
“Some companies are about to use up their loans and I think if the emergency continues in February, companies will go bankrupt one after the other, even in Ginza,” said Sugiyama, who also leads a coalition of about 370 local restaurants and bars.
Still, a Nikkei / TV Tokyo survey suggests public support for a longer emergency. The poll of January 29-31 showed that 90% of respondents were in favor of an extension.
The government has said the emergency could end when the virus crisis eases to Stage 3 on a four-stage scale that uses six data points.
In Tokyo, that would mean that the number of daily infections would drop below 500. Tokyo reported 633 new infections on Sunday, well below the recent peak of 2,447 on Jan. 7. As of January 27, the occupancy rate of hospital beds in the capital was 73% and intensive care. According to the Ministry of Health, units had 113% of the capacity. Both numbers should drop below 50% to reach Stage 3.
“We can see that the state of emergency has had an impact, but it has been too weak,” said Yoshihito Niki, professor of clinical infectious diseases at Showa University’s School of Medicine in Tokyo, who said measures should be extended. “The government will have to be patient at least until February.”
The Sanjo shopping arcade in Kyoto, January 14. The government has said the emergency could end when the virus crisis eases to stage 3 on a four-stage scale based on six data points.
Photographer: Kosuke Okahara / Bloomberg
The Japanese parliament will pass two bills this week imposing sanctions on those who fail to adhere to official virus guidelines. This includes fines from until According to the website of the opposition Constitutional Democratic Party of Japan, 300,000 yen ($ 2,866) for bars and restaurants failing to comply with the order to close early. A separate infectious disease control law would allow fines of as much as 500,000 yen for people with Covid-19 who refuse to be hospitalized or leave before formally discharged.
Since the state of emergency was declared in early January, economists have warned that the less stringent advice compared to the first state of emergency in April threatened to be insufficient and would cause more damage in the long term. This time, the schools remained open and the streets continued to see foot traffic, albeit smaller than during 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, shaving about 3 trillion yen from the economy.
While analysts agree that the economy will contract by 2.5% year on year this quarter, economists Yoshimasa Maruyama and Koya Miyamae of SMBC Nikko Securities Inc. now a stronger close to 2020, reaching a contraction of 11.5% in the three months to March. .
Yet an unemployment rate of only 2.9% and an annual decline in bankruptcies show that spending and loan support from the government and the Bank of Japan has so far helped cushion the economic blow of the pandemic. Suga’s government received a third extra budget through parliament last week for a new round of aid for businesses, medical facilities and the economy.
The concern that is underway is how much longer businesses can hold out if the emergency is extended and consumer spending remains subdued.
Yasuhide Yajima, chief economist at NLI Research Institute, warns that there will not be a dramatic resurgence in growth, even after the emergency is over, unless there is more concrete reassurance for the public.
“Regardless of the emergency, consumption will not return until we see the impact of vaccination,” said Yajima.
– With the help of Emi Nobuhiro, Gearoid Reidy, Isabel Reynolds and Toru Fujioka
(Updates details on proposed fines, a poll on emergency renewal, and GDP forecasts.)