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Tanking Japanese Economy Desperate for Reopening Boost

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The roller coasters are running again in Tokyo but with requests to stifle screams. Restaurants are offering take-out and outdoor seating. Major retailer Uniqlo’s new “cool and dry” mask, three for 990 yen ($9), sold out Friday shortly after it was put on the shelves.

Japan’s economy is opening slowly, with social-distancing restrictions still in place amid the coronavirus pandemic.

Japan’s long stagnant economy sorely needs tourism, exports and thriving small businesses to avoid sliding deeper into recession.

Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities, said although Japan’s restrictions were never as strict as the lockdowns in the U.S., Europe and some other parts of Asia, the damage was still considerable.

Japan’s economy was already hurting from a tax increase last year. Then auto exports to the U.S. and Europe plunged when the pandemic hit. Consumer spending is unlikely to recover quickly.

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“Americans may feel happy and go splurging after the lockdown is lifted. But the Japanese mindset tends to become even more cautious about spending because of uncertainties about the future,” Maruyama said.

A return to pre-pandemic levels of economic activity is not expected for Japan until 2023, a year after a likely recovery in the U.S., he said.

Although shuttered businesses are opening again, fewer seats are allowed at theaters and bars. Masked clerks peer from behind plastic curtains at stores where temperatures are checked and hands disinfected at the entrance. Professional baseball teams are playing in empty stadiums.

Masks, worn by many Japanese already anyway, are the dress code everywhere.

Should Japan reopen its economy more quickly?

Japan’s exports and imports have plunged. The world’s third largest economy has contracted for two straight quarters and is already officially in recession.

The Tokyo Olympics, a symbol of hope for the economy, has been postponed until next year, costing billions of dollars to the capital, although the exact amount has not been disclosed.

The government has announced 230 trillion yen ($2 trillion) in stimulus, including help for local businesses and cash handouts of 100,000 yen ($930) per adult to coax consumers into spending.

With about 1,000 COVID-19 deaths, Japan has seen far fewer fatalities than countries like Italy, Spain, the U.S., Brazil and Russia.

The government is considering reopening travel to and from countries where COVID-19 cases are relatively limited and comparable to Japan’s, such as Australia, New Zealand, Vietnam and Thailand.

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The 1,700 visitors to Japan in May was a decrease of 99.9 percent from the year before, according to the Japan National Tourism Organization, and the lowest figure since the government began keeping track in 1964.

In recent years Japan has attracted about 30 million visitors from abroad, mostly from South Korea and China.

Travel within Japan was temporarily curtailed by the government but is now encouraged. The government is giving out discount coupons to use at tourist spots.

After being stuck at home, many Japanese have been hankering to get outside and have some fun.

That includes law student Yota Nakano, who rode the roller coasters at Yomiuri Land, a Tokyo amusement park that recently reopened.

“Even though I couldn’t scream, I enjoyed it from the bottom of my heart,” he said.


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