Japan declares state of emergency; approves 1 trillion yen stimulus package

Tokyo

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 economic blow.

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 per cent of Japan's population.

"The most important thing now is for each citizen to change our actions," Mr 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 per cent, and ideally by 80 per cent, 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 (S$1.41 trillion) - equal to 20 per cent of Japan's economic output - to cushion the impact of the epidemic on the world's third-largest economy.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

That exceeds the equivalent of 11 per cent of US output for the stimulus package laid out by President Donald Trump and 5 per cent of output for Germany's package.

Direct fiscal spending amount to 39.5 trillion yen, or about 7 per cent of the economy, more than double the amount Japan spent following the 2008 collapse of Lehman Brothers.

Japan will also sell a record amount of extra bonds this fiscal year to support the record stimulus package. The 18.2 trillion yen extra bond issuance in the new fiscal year from April beat the previous record of 16.9 trillion yen issued during the 2009 global financial crisis, bringing overall annual market issues to a five-year high of 147 trillion yen.

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 Mr Abe to announce a state of emergency.

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.

Mr 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.

The government would not ask rail companies to reduce the number of trains in operation, Mr Abe said.

Other essential infrastructure like mail and utilities would operate, as will ATMs and banks, public broadcaster NHK said. REUTERS