Japan looks to end Tokyo virus emergency

Japan is looking to lift a state of emergency for Tokyo and remaining areas still facing restrictions while also considering fresh stimulus worth almost 100 trillion yen ($A1.4 trillion) to help companies ride out the coronavirus pandemic, Nikkei has reported.

Social distancing curbs were removed for most of the country on May 14 as new infections fell but the government had kept Tokyo and four other prefectures under watch.

The government will seek approval from key advisers for the lifting on Monday. If approved, Japan would have no regions under the state of emergency, which was first instated on April 7.

Tokyo Governor Yuriko Koike has said the capital would swiftly move into “stage one” of the lifting of curbs if the government ends the state of emergency. That would allow libraries and museums to reopen, and restaurants to stay open until later in the evening. Subsequent stages would see theatres, cinemas and fairgrounds reopen.

While the world’s third-largest economy has escaped an explosive outbreak, with about 17,000 infections and 825 deaths, the epidemic has tipped it into a recession and plunged Prime Minister Shinzo Abe’s popularity to multi-year lows.

Abe will hold a news conference on Monday evening, when he is expected to announce the plan to lift the state of emergency.

To support an economy on track for its deepest slump in postwar history, the government is considering fresh stimulus worth 100 trillion yen, mostly comprising financial aid for companies, the Nikkei newspaper said.

The package, to be funded by a second supplementary budget, would follow a record 117 trillion yen spending plan deployed last month.

The combined spending would bring the total stimulus in response to the pandemic to about 40 per cent of Japan’s gross domestic product.

The new package includes 60 trillion yen to expand loan programs that state-affiliated and private financial institutions offer to firms hit by virus, the Nikkei said. Another 27 trillion yen would be set aside for other aid including capital injections for ailing firms, the paper said.

The government is expected to approve the budget, which will also include subsidies to help companies pay rent and wages, at a cabinet meeting on Wednesday.

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