By ISABEL REYNOLDS and EMI NOBUHIRO / BLOOMBERG
Prime Minister Yoshihide Suga is set to extend a state of emergency covering Japan’s major metropolitan areas to March 7, seeking to control Covid-19 after infections hit record highs about a month ago.
The administration’s point man for virus policy, Economy Minister Yasutoshi Nishimura, said an advisory panel on Tuesday approved a government proposal to extend the emergency, currently due to expire on Feb. 7, by a month. Suga was expected to formally make the extension later in the day after hearing from the panel, Kyodo News and other local media reported.
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.
Nishimura said the extension will apply to 10 of the 11 areas and remove Tochigi. That prefecture, located north of Tokyo, saw a sharp drop in infections in January.
“The number of infected people is falling but I think caution is still needed for a while,” Suga told reporters Monday evening. The prime minister will hold a news conference at 7:40 p.m. Tuesday to discuss the virus.
The extension will put more pressure on the economy. The two-month emergency is likely to slice around 3 trillion yen ($28.6 billion) off gross domestic product, according to Toshihiro Nagahama, economist at Dai-Ichi Life Research Institute.
As of Jan. 29, economists expected the economy 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.
While Covid-19 infections have fallen from January peaks, government officials have indicated the drop has not been enough to warrant an end to the emergency.
The extension comes as Suga tries to reverse a slip in support among a public critical of his virus policies ahead of an election that must be held by October. With the vaccine roll-out not set to start in Japan until the end of the month, restrictions on activities remain his main tool for controlling the spread of infections.
Japan’s lower house of parliament passed two bills Monday imposing penalties on those who fail to obey official coronavirus virus 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 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 fewer 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, with nearly a third of its residents 65 or older.