Japan’s Abe likely to give cash payments as Covid-19 response
The Japanese leader is getting criticism for his slow response to the pandemic, and has expanded the country’s state of emergency
Tokyo — Japanese Prime Minister Abe Shinzo expanded a state of emergency to include the entire country on Thursday and said the government is considering cash payments for all in an effort to stem the coronavirus spread and cushion the economic downturn.
With more than 9,000 infections and nearly 200 deaths nationally, the government has declared an emergency in Tokyo and six areas including western Osaka, but other regions have sought to be added amid worries about the spreading virus.
While short of a lockdown, the state of emergency imposed for a month from April 7 gives authorities more power to push people to stay home and businesses to close. It has covered about 44% of the population up until now.
Abe said the emergency will be in place until May 6 and is aimed at reducing traffic during the Golden Week holiday season around the start of May. “We absolutely need to avoid people moving across prefectures to prevent the spread of the virus heading towards Golden Week,” he said, in comments following a meeting with advisers.
Abe is under pressure to do more to control the virus amid perceptions that his response has been too little, too late, denting his support among voters, and Japan Inc.
Japan faces a long battle and governors will need to tailor their response to local needs, Koji Wada, an expert advising policymakers, said. “We are still on the brink of the Covid-19 war,” added Wada, a professor at the capital’s International University of Health and Welfare. “We are still just at the beginning.”
Health minister Katsunobu Kato said officials are worried about the rapid spread of infections, which more than doubled between April 7 and Wednesday. In particular, officials are worried that travellers during the holiday could carry the virus to places where infections have so far been low, Kato said.
Abe is due to hold a news conference at 9am GMT on Friday.
Deep economic bite
Abe said the government is considering cash payouts of ¥100,000 ($930) for everyone, an attempt to cushion the blow to the world’s third-largest economy.
The government’s supplementary budget plan has set aside funds for cash payouts of ¥300,000 to households with incomes that have been hit by the virus, but that will be changed to the individual payouts, a government official with direct knowledge of the matter said.
The change follows growing calls from ruling and opposition lawmakers for bolder steps by Abe to help people ride out the pandemic.
The International Monetary Fund (IMF), which expects Japan’s economy to contract by 5.2% this year, has urged it to boost fiscal spending and focus on easing the hit to growth.
Sources have told Reuters that the Bank of Japan is likely to project an economic contraction for this fiscal year and discuss further measures to ease corporate funding strains at its rate review on April 27-28.
Before it can take effect, parliament must approve the draft supplementary budget, compiled to fund a near $1-trillion stimulus package Abe’s administration unveiled last week. It is rare for the government to make changes to a draft budget, which is carefully prepared by the finance ministry to account for the views of politicians.
Any change would underscore the challenge Abe faces in tackling the growing economic toll of the pandemic without putting too much strain on already tattered finances.
A Reuters poll showed most Japanese corporations are disappointed by the government’s stimulus plan. Surveys show that Abe has lost support over what critics call a timid and sluggish pandemic response, and an appearance of being tone deaf to the severity of the crisis in his own social media posts.
Support for Abe’s cabinet fell four points to 39% in an NHK survey published on Monday, with 75% saying his emergency declaration came too late.
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