Japanese Prime Minister Yoshihide Suga is due to declare a state of emergency on Thursday for Tokyo and surrounding areas, trying to contain Covid-19 infections, which reach a daily record in the capital.
The declaration will cover the capital and neighboring prefectures of Kanagawa, Saitama and Chiba, and is due to be imposed from Friday until February 7, said Economy Minister Yasutoshi Nishimura. It will be revoked when infections fall below levels set by the government, he added.
Suga should give a press conference at 6 pm to discuss the matter. Tokyo found more than 2,000 cases of coronavirus on Thursday, a record, NHK reported, citing an unidentified employee.
Crowds at the Ameya Yokocho market in Tokyo, December 30, 2020.
Photographer: Noriko Hayashi / Bloomberg
Japan’s emergency does not imply the type of blockade seen in some parts of Europe, and the government is seeking far less stringent measures than in the previous emergency last year, which triggered the worst economic contraction on record.
Residents will be advised to avoid leaving only after 8 pm and bars and restaurants will be advised to close at that time. The authorities cannot enforce compliance for the time being, although Suga is trying to amend the law to add penalties for companies that fail to comply with government measures and formalize incentives for those who do.
Watch: Japanese Prime Minister Yoshihide Suga must declare a state of emergency for Tokyo and surrounding areas, as coronavirus infections continue to reach record levels.
Bloomberg Economics’ Yuki Masujima sees the emergency declaration being reduced up until 0.7% discount on savings for each month that lasts. Tokyo and neighboring areas account for about a third of the country’s gross domestic product.
Balloon infections were a blow to Suga, who sought to restore growth despite the pandemic, including offering incentives for domestic travel to boost the tourism industry. Their public support fell, with polls showing the majority of voters favor tougher pandemic measures.
“This increases the possibility of an economic contraction,” said SMBC Nikko Securities economist Yoshimasa Maruyama of the emergency. “Suga wanted to wait until after the New Year holiday to make the statement and that put him back on the curve to limit the spread of the virus.”
Even before Suga hinted that he would declare an emergency, the economic recovery was expected to slow down in the first three months of 2021, with companies reducing investment and families choosing to save more.
Activity restrictions are likely to undermine the effectiveness of the economic stimulus package that Suga drew up last month, which will be financed by an extra budget. The package is no longer suited to the current environment, economist Takahide Kiuchi of the Nomura Research Institute said in a research note.
“The government must change the content of the third extra budget and change the course of economic policy in order to strengthen support for companies and individuals,” said Kiuchi.
The emergency declaration decision will be formally announced after a day of consultation with advisers and reports to parliamentary committees. A pandemic advisory panel on Thursday approved the emergency proposal, Nishimura said.
It will be the second in Japan after a statement that started in April, but that should not cause as much pain as the first, when the virus stopped the economy and led it to its worst slowdown.
Photographer: Yoshikazu Tsuno / Gamma-Rapho / Bloomberg
Suga’s “Go To” travel campaign, which had already been suspended until January 11, is unlikely to be reactivated while the state of emergency is in place. The government will push for a return to remote work, aiming cut the number of passengers in the region by 70%, said Nishimura. Schools, however, will not be required to close and university entrance exams will be conducted as scheduled.
Japan has had the lowest infections by far than any nation in the Group of Seven, registering fewer cases last year than the United States in recent days.
– With the help of Karen Leigh, Lily Nonomiya, Yoshiaki Nohara and Paul Jackson
(Updates with Tokyo infection numbers.)