Restaurants closed in Shibuya district of Tokyo on January 8, bars and restaurants are among the companies hardest hit by the guidelines.
Photographer: Kentaro Takahashi / Bloomberg
Photographer: Kentaro Takahashi / Bloomberg
Japanese Prime Minister Yoshihide Suga is scheduled this week to extend the state of emergency to major subway areas that will inflict more pain on the economy as he tries to curb Covid-19’s record cases and reverse the fall of public support.
In addition, parliament is expected to vote Monday on measures to add teeth to emergency orders, including fines on bars and restaurants that defy current voluntary guidelines to close at 8 p.m.
The emergency that covered 11 areas, including Tokyo, Osaka and Nagoya, has helped halt a rapid acceleration in virus cases, which hit record highs in early January and sparked concerns about breaking the world’s oldest population. . Although the number of infections has decreased since then, the Suga government has said they are still worrisome.
Suga plans to extend the emergency about a month beyond the February 7 deadline and possibly remove it from the Tochigi prefecture list as the situation improves there, according to local media. reports. The announcement could arrive as early as Monday, FNN reported.
Japan’s current measures, which also include looking for people to work from home, are far less stringent and enforceable than the closures of some European nations. But, according to economists, they have already brought about a maritime change. Instead of the year starting with a slow recovery, some of them are now seeing a double-digit contraction.
Japan’s outbreaks make Suga look more like the short-term premiere
The prime minister, who runs the risk of being replaced by the ruling party ahead of elections to be held in October, has seen his support dwindle since he took office a few years ago. four months. Critics argue that its focus on boosting the economy has hampered efforts to curb infections. It now faces spreading the difficulty for companies to control the virus, strengthening their leadership and keeping alive the hope to celebrate the Summer Olympics.
Downward trend
Cases coveted in Tokyo have begun to dwindle during emergencies
Source: Tokyo Metropolitan Government
“The damage to businesses would be huge,” said Mamoru Sugiyama, owner of a sushi restaurant, referring to an extension. Bars and restaurants are among the companies most affected by the guidelines. He has temporarily closed his restaurant, which has a 130-year history in the Ginza shopping district of Tokyo.
“Some companies are about to run out of their loans and I think if the emergency continues until February, companies can start exploding one after the other, even in Ginza,” said Sugiyama, who also heads A coalition of about 370 local restaurants and bars.
However, a Nikkei / TV poll in Tokyo suggests public support for a longer emergency. The January 29-31 survey showed that 90% of respondents were in favor of an extension.
The government has said the emergency may end when the virus crisis is reached in phase 3 on a four-stage scale based on six data points.
In Tokyo, this would mean that daily infections would drop from 500. Tokyo recorded 633 new infections on Sunday, well below the recent high of 2,447 on January 7th. As of Jan. 27, the occupancy rate of hospital beds in the capital was 73% and critical care units had a 113% capacity, according to the health ministry. Both numbers should drop below 50% to reach phase 3.
“We can see that the state of emergency has had an impact, but it has been too weak,” said Yoshihito Niki, a professor of clinical infectious diseases at Showa University School of Medicine in Tokyo, indicating the need to prolong the measures. “The government will have to exercise patience at least until February.”
The Sanjo Mall in Kyoto on January 14th. The government has said the emergency may end when the virus crisis is reached in phase 3 on a four-stage scale based on six data points.
Photographer: Kosuke Okahara / Bloomberg
This week, the Japanese Parliament will pass two bills that will impose sanctions on those who do not comply with official virus guidelines. This would include fines of Until 300,000 yen ($ 2,866) in bars and restaurants that do not comply with early closure orders, according to the website of Japan’s constitutional democratic party. A separate act on infectious disease control would allow fines of up to 500,000 yen for those people with Covid-19 who refuse to enter the hospital or leave before receiving formal discharge.
Since the declaration of emergency in early January, economists have warned that less stringent warnings compared to the first emergency in April run the risk of being insufficient and causing more damage over time. This time, the schools remained open and the streets continued to see traffic on foot, albeit smaller than during normal hours, despite repeated calls from officials to stay home.
Toshihiro Nagahama, an economist at the Dai-Ichi Life Research Institute, sees an emergency extending to two months shaving about 3 trillion yen from the economy.
While consensus among analysts is that the economy will shrink 2.5% year-on-year this quarter, economists Yoshimasa Maruyama and Koya Miyamae of SMBC Nikko Securities Inc. will now see a stronger end to 2020 making a contraction of 11.5% in the three months to March.
However, an unemployment rate of only 2.9% and a year-on-year fall in the number of bankruptcies show that government and Bank of Japan spending and loan support have helped cushion the economic impact of the pandemic. Bye now. The Suga administration got a third extra budget through parliament last week, offering another round of aid to businesses, medical centers and the economy.
The concern for the future is how long companies can last longer if the emergency is extended and consumer spending is maintained.
Yasuhide Yajima, chief economist at the NLI Research Institute, warns that there will be no dramatic revival of growth even when the emergency ends, unless there is more concrete security 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
(Update details on proposed fines, a survey on emergency extension and GDP forecasts.)