By Leika Kihara
TOKYO (Reuters) – The total number of novel Japanese coronavirus infections reached at least 5,002 on Thursday, the public broadcaster NHK said. Despite the state of emergency imposed on Tokyo and six other areas this week, there were no signs of slowing down.
The milestone came when the central bank warned that the coronavirus pandemic had created an “extremely high” level of uncertainty for the world’s third largest economy, with regional economies facing the worst conditions since the global financial crisis a decade ago.
The Japanese authorities hope to curb the outbreak without imposing a mandatory lock that could deal a severe blow to an economy already struggling with the virus outbreak.
According to the central government’s declaration, the state of emergency gives local governors greater legal powers to urge people to stay at home and close business.
Contrary to strict bans in some countries that require fines and non-compliance arrests, enforcement will be more based on peer pressure and a deeply rooted Japanese tradition of respect for authority.
Tokyo’s nightlife areas of Shibuya, Akasaka, and Ginza were much quieter overnight than usual when the emergency came into effect, but elsewhere on Thursday, things seemed to be as busy as usual.
The number of new infections rose by at least 29 to 5002 on Thursday, while the death toll rose by 1 to 105, according to Japanese media reports.
Hideaki Omura, the governor of Central Japan’s Aichi Prefecture, said he would declare a state of emergency on Friday even if the central government did not include him on the national list of emergency prefectures.
Aichi includes the city of Nagoya and is home to Toyota Motor Corp.
“If we see what happened in the past week, it doesn’t look good and we are making preparations,” he said.
ECONOMY ON BRINK
Even with less stringent restrictions compared to other countries, analysts surveyed by Reuters expect Japan to enter a deep recession this year as the virus outbreak affects business and daily life.
While aggressive action by central banks around the world has eased tensions in financial markets somewhat, corporate finance burdens have worsened, Bank of Japan governor Haruhiko Kuroda said Thursday at a quarterly meeting of the bank’s regional branch managers.
“The spread of the corona virus has had a serious impact on the Japanese economy through declines in exports, production, demand from overseas tourists and private consumption,” he said.
“For the time being, we will not hesitate to take further monetary easing if necessary to closely monitor developments related to the outbreak of the corona virus.”
For the first time in eleven years, the BOJ has shortened its assessment for all nine regions of Japan and declared that its economies are weak or under strong downward pressure.
“The situation is pretty serious. Business sentiment is bad. Inbound tourism and consumption companies are experiencing a sharp drop in sales,” said Yasuhiro Yamada, BOJ branch manager in Osaka, who oversees the Kinki region in western Japan a press conference.
Oriental Land Co’s shares fell Thursday after the Tokyo Disneyland operator announced it would keep the amusement park closed until mid-May.
The operator of the entertainment facility, Uchiyama Holdings, announced that it would close 43 karaoke stores and 11 restaurants by May 6.
According to Fast Retailing, sales in Uniqlo stores in March decreased 27% year over year. However, retail group Seven & i Holdings Co saw a 3% increase in annual operating profit thanks to robust sales of food and other daily necessities.
Kuroda’s statements underline the high level of concern among policymakers about the prospects for the Japanese economy and how companies continue to struggle to generate cash despite government and central bank promises to flood the economy with money.
At its political meeting later this month, the BOJ is likely to make a rare forecast that the economy will shrink this year, sources told Reuters.
The BOJ eased monetary policy in March by promising to stimulate the purchase of government, commercial paper, corporate and equity trust funds.
The government has also implemented a $ 1 trillion stimulus package to mitigate the economic blow.
Interactive graphical tracking of the worldwide spread of corona virus: Open https://tmsnrt.rs/3aIRuz7 in an external browser.
(Reporting by Leika Kihara; Additional reporting by Yoshifumi Takemoto, Elaine Lies and Kaori Kaneko; Editing by Chris Gallagher and Stephen Coates)