More than 80% of Japanese firms back nuclear restart, tourism resumption

A LARGE majority of Japanese companies support both restarting idled nuclear reactors and this month’s resumption of foreign tourism, a Reuters survey showed, highlighting broad approval for 2 measures seen as likely to ease strain on the economy.

Results of the monthly Reuters Corporate Survey are among the strongest signs yet of Japan Inc’s endorsement of a return to nuclear power, as higher global energy prices and a tumbling yen drive up input costs for manufacturers and squeeze households.

Nuclear power remains a sensitive issue in Japan after a devastating earthquake and tsunami in 2011 crippled the Fukushima Daiichi plant and caused the world’s worst nuclear accident since Chernobyl. But rising energy prices from the Ukraine crisis appear to be turning public opinion on the issue.

“Until we get new energy sources, such as hydrogen, economic activity won’t move forward without restarting nuclear reactors,” a manager at a paper and pulp company wrote.

Japan idled the bulk of its nuclear reactors - more than 40 - in the aftermath of the Fukushima disaster, leaving it with around 10 operational now.

Overall, 85 per cent of firms were in favour of restarting nuclear reactors if safety requirements were met, according to the poll of 500 large and mid-size non-financial firms conducted from Jun 1 to 10 by Nikkei Research for Reuters. Around 240 firms responded.

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Their comments showed economic concerns playing a prominent role in consideration of nuclear power.

“Structural power shortages have a big impact on the economy, making nuclear power restart essential,” wrote a manager at a wholesaler.

The results compared with those of the April survey, in which almost 60 per cent of firms said the government should move “quickly” to restart reactors. The latest survey did not ask about timing of a restart, however, so direct comparison is difficult.

A public opinion poll by the Nikkei newspaper in March showed 53 per cent of voters believed the government should restart reactors.

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Similarly, the survey showed 89 per cent of firms welcoming the government’s decision to again permit limited inbound foreign tourism. Many firms expected the move would aid in the recovery from the pandemic - though it suggested they did not want border limits to be fully relaxed until 2023.

Since Jun 10, the government has allowed a limited number of foreign tourists to enter on package tours. This is a first phase, after 2 years of Covid-19 curbs.

Policymakers have faced the difficult task of trying to balance the economic benefits of tourism with concerns that travellers would trigger a Covid resurgence.

An industry executive said local governments remained worried that foreign tourists might spread the virus, which would make it hard to open the country fully.

About a quarter of firms said the government should bring the number of foreign visitors back to pre-pandemic levels this year, while 58 per cent said it should wait until 2023 before doing so.

“You cannot rule out the possibility (a re-opening) could trigger resurgence of infections,” a manager at a ceramics company wrote in the survey on condition of anonymity. “However, vaccines are keeping infections from becoming worse. Even considering the risk, merits stemming from inbound demand outweigh demerits.”

Before the Covid-19 outbreak, tourism was a rare bright spot for Japan, with a record of about 32 million foreign tourists spending 4.81 trillion yen (S$49.7 billion) in 2019. The government aims to bring in 60 million tourists a year by 2030.

Japan imposed some of the strictest border controls in the world during the pandemic, banning the entry of almost all non-residents and causing tourism demand to plunge.

Seven out of 10 firms in the survey expected that, upon easing of border measures, inbound tourism would help boost economic growth “somewhat” this fiscal year, while 18 per cent saw it “greatly” contributing to growth. REUTERS