Japan declares coronavirus emergency, approves near $1 trillion stimulus
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[April 07, 2020]
By Takaya Yamaguchi and Junko Fujita
TOKYO (Reuters) - Japanese Prime Minister
Shinzo Abe on Tuesday declared a state of emergency to fight new
coronavirus infections in major population centres and unveiled a
stimulus package he described as among the world's biggest to soften the
The state of emergency, giving authorities more power to press people to
stay at home and businesses to close, will last through May 6 and be
imposed in the capital, Tokyo, and six other prefectures - accounting
for about 44% of Japan's population.
"The most important thing now is for each citizen to change our
actions," Abe said in televised comments made at a meeting of a
government task force.
"If each of us can reduce contact with other people by at least 70%, and
ideally by 80%, we should be able to see a peak in the number of
infections in two weeks," he said.
The government also approved the stimulus package worth 108 trillion yen
($990 billion) - equal to 20% of Japan's economic output - to cushion
the impact of the epidemic on the world's third-largest economy.
That exceeds the equivalent of 11% of U.S. output for the stimulus
package laid out by President Donald Trump and 5% of output for
Direct fiscal spending amount to 39.5 trillion yen, or about 7% of the
economy, more than double the amount Japan spent following the 2008
collapse of Lehman Brothers.
Japan has been spared the big outbreaks of the coronavirus seen in other
global hot spots, but a recent, steady rise in infections in Tokyo,
Osaka and other areas led to growing calls for Abe to announce a state
Coronavirus infections in Tokyo more than doubled to about 1,200 in the
past week, with more than 80 new ones reported on Tuesday, accounting
for the highest number in the country. Nationwide, cases have climbed
past 4,000 with 93 deaths as of Monday.
Abe has stressed that the state of emergency will stop short of imposing
a formal lockdown as seen in other countries.
The emergency gives governors the authority to call on people to stay at
home and businesses to close. With no penalties for ignoring the
requests in most cases, enforcement will rely more on peer pressure and
respect for authority.
Tokyo Governor Yuriko Koike said the city was in talks with the central
government to decide what types of facilities it would ask to close or
curtail business hours, while reiterating there would be no restrictions
on buying groceries and medicine.
[to top of second column]
Japan's Prime Minister Shinzo Abe speaks during a press conference
at the prime minister's official residence, during the coronavirus
disease (COVID-19) outbreak, in Tokyo, Japan April 7, 2020. Tomohiro
Ohsumi/Pool via REUTERS
The government would not ask rail companies to reduce the number of
trains in operation, Abe said.
Other essential infrastructure like mail and utilities would
operate, as will ATMs and banks, public broadcaster NHK said.
Minister of Agriculture, Forestry and Fisheries Taku Eto called on
shoppers to stay calm.
"We are asking citizens to buy only what they need when they need it
as there is sufficient food supply and no suspension is planned at
food factories," he told reporters earlier, adding there was no sign
of disruption to Japan's grain imports.
But the restrictions will add to pains the virus is inflicting on
the world's third-largest economy, which is seen as already in
recession as supply chain disruptions and travel bans chill factory
output and consumption.
Metropolitan Tokyo alone accounts for about 20% of Japan's overall
gross domestic product.
Japan will sell a record amount of additional bonds worth more than
18 trillion yen to fund the package, adding to its huge debt which
is twice the size of its economy.
While the stimulus could ease the immediate damage from the
pandemic, lawmakers are already calling for even bigger spending to
prevent bankruptcies and job losses.
Analysts expect the economy, which shrank in the final quarter of
last year, to post two more quarters of contraction, piling pressure
on the government and the central bank to do more.
"The government will probably compile another supplementary budget
soon to stimulate the economy with even more spending," said
Takahide Kiuchi, a former Bank of Japan board member who is now an
economist at Nomura Research Institute.
(Reporting by Chris Gallagher, Chang-Ran Kim, Linda Sieg, Ju-min
Park, Leika Kihara, Makiko Yamazaki, Rocky Swift, Junko Fujita,
Takaya Yamaguchi, Tetsushi Kajimoto and Yuka Obayashi; Writing by
Chris Gallagher, Leika Kihara and Linda Sieg; Editing by Robert
Birsel and Richard Pullin)
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