Japan Extends Virus Emergency by a Month for Tokyo, Other Cities

Japanese Prime Minister Yoshihide Suga extended a state of emergency covering Tokyo and other major metropolitan areas to March 7, seeking to control Covid-19 after infections hit record highs in January.

Suga on Tuesday added another month to the measure due to expire on Feb. 7, after saying that while infections have come down, the numbers were still a concern.

The current emergency measure has been in effect since early January for 11 areas, including Tokyo and Osaka, that account for about 60% of the economy’s total output. It calls for residents to avoid going out after 8:00 p.m., while bars and restaurants have been asked to voluntarily close at that time.

Japan Extends Virus Emergency by a Month for Tokyo, Other Cities

The extension was for 10 of the 11 original areas with the prefecture of Tochigi, north of Tokyo, being taken off the list after it saw a sharp drop in infections.

“Since we declared the emergency, the number of new infections in Tokyo and across the country is trending down, so we can say that the measures have had a clear effect,” Suga said. “We need to continue this downward trend and reduce the numbers in hospitals and in serious condition.”

The measure could be lifted before March 7 in areas that achieve sufficient improvement, he added. Suga also announced that the rollout of vaccines in Japan would be brought forward slightly to mid-February from the end of the month, with medical personnel receiving the initial doses. He added while Japan has been quick to secure vaccines, it has been slow to start inoculations.

Suga has been trying to seek a balance of propping up a virus-battered economy and clamping down on infections, especially ahead of Tokyo hosting the Olympics from July -- but the extension puts new pressure on finances. The two-month emergency is likely to slice around 3 trillion yen ($28.6 billion) off gross domestic product, according to Toshihiro Nagahama, an economist at Dai-Ichi Life Research Institute.

As of Jan. 29, economists expected GDP to shrink by an annualized 2.5% this quarter, having previously forecast an expansion, though some analysts see a much bigger hit. Economists at SMBC Nikko Securities Inc. now see a stronger finish to 2020 morphing into an 11.5% contraction in the three months through March.

JAPAN REACT: Longer Virus Emergency Better Than Ending Emergency

The extension comes as Suga tries to reverse a slide in support among a public critical of his virus policies ahead of an election that must be held by October. When it comes having spectators at the Tokyo Olympics, Suga didn’t give a definitive answer, saying he will be keeping safety in mind while watching the local and international situation.

Japan’s lower house of parliament passed two bills Monday imposing penalties on those who fail to obey official coronavirus management orders, adding teeth to the current voluntary guidelines. The legislation was expected to gain final approval later this week in the upper house, which is also controlled by Suga’s ruling coalition.

Under the revised special measures act, businesses can be fined up to 300,000 yen ($2,870) if they don’t comply with official orders to shorten their operating hours. A separate act on controlling infectious diseases would allow fines of as much as 500,000 yen on those with Covid-19 who refuse to be hospitalized.

It was unclear when the new legislation will come into effect.

The government is seeking to bring infections down to stage 3 of four levels before lifting the emergency. That would mean numbers in Tokyo need to fall below 500 per day and 300 per day in Osaka, and the strain on hospitals must ease.

Tokyo reported 556 new infections on Tuesday, well below the city’s daily record of 2,447 on Jan. 7. However, the number of patients in hospitals has changed little since the emergency was declared.

The country has posted by far the fewest confirmed Covid-19 cases of any Group of Seven country, recording a lower number of cases in all of 2020 than the U.S. tallied on certain days in January.

Japan has yet to see the explosive surges that devastated medical systems in the U.S. and European countries. But with the developed world’s oldest population, Japan sits on a tinderbox -- nearly a third of its residents are 65 or older, and therefore more vulnerable to the virus.

“The tough medicine should lead to a stronger growth outcome further ahead -- if it succeeds in reducing cases and avoiding even stronger measures later,” wrote Bloomberg Economics’ Yuki Masujima.

©2021 Bloomberg L.P.

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