Japan PM Abe lifts coronavirus state of emergency

Marco Green
May 25, 2020

Japan appeared to have the novel coronavirus epidemic well-contained but by March 24, when the 2020 Olympics in Tokyo were called off, the virus was spreading fast, forcing the country to call a state of national emergency.

Traders are caught between concerns over a second coronavirus wave and US-China tensions on one hand and hopes that lifting the emergency will spur economic recovery in Japan, said Hideyuki Ishiguro, senior strategist at Daiwa Securities.

Coronavirus has also taken its toll politically, with polls showing support for Abe falling rapidly - a recent survey for the Asahi Shimbun suggested backing had dropped to 29 percent, the lowest since he took office in 2012.

Red tape blocks off some seats in an attempt to promote social distancing at a movie theatre which reopened May 22, in Kyoto, western Japan.

On Saturday, Tokyo reported two cases, the lowest single-day tally since Japan declared a state of emergency last month.

Abe was expected to confirm the decision formally at a news conference at 6 pm (0900 GMT).

Economy Minister Yasutoshi Nishimura, at a special task force meeting, asked experts on a government-commissioned panel to evaluate a plan to lift the measure. Restaurants will be allowed to stay open till later in the evening, and public events will be permitted so long as they number fewer than 50 people. Subsequent stages would see theatres, cinemas and fairgrounds reopen.

The fresh stimulus plan would be the latest effort to support an economy on track for its deepest slump in postwar history, as the pandemic crushes businesses and consumer spending.

The combined stimulus would bring the total spending in response to the pandemic to about 40 per cent of Japan's gross domestic product.

The government is expected to approve the budget, which will also include subsidies to help companies pay rent and wages as they close businesses, at a cabinet meeting on Wednesday.

Another 27 trillion yen will be set aside for other financial aid programmes, including 15 trillion yen for a new programme to inject capital into ailing firms, it said.

The world's third-largest economy has plunged into its first recession since 2015, data published last week showed, shrinking by 0.9% in the first quarter.

Other reports by Click Lancashire

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