Coronavirus: Japan mulls cash payouts, US$276 billion stimulus to fend off crisis

The government has promised a bold stimulus package to fend off a crisis described as more serious than the 2008 financial meltdown

But concerns remain that Japan is not doing enough to contain the outbreak and is using only a sixth of its capacity to conduct testing

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People wearing face masks cross a street in Tokyo’s Ginza area. Photo: AFP

Published: 12:34pm, 19 Mar 2020Updated: 12:48pm, 19 Mar 2020

Japan will look into offering cash payouts to households as part of a stimulus package that could be worth more than US$276 billion to combat the widening fallout from the coronavirus outbreak.

Economy Minister Yasutoshi Nishimura said the stimulus package, likely to be compiled by the government in April, will be bold enough to fend off a crisis he described as potentially more serious than when the collapse of Lehman Brothers in 2008 jolted financial markets.

“We’d like to look into various possibilities including on the size of any cash payouts,” Nishimura told reporters after a cabinet meeting on Thursday, though he could not say at this stage what the size of the package would be.

The Sankei newspaper reported on Thursday Japan’s ruling coalition was considering an economic package worth more than 30 trillion yen (US$276 billion) to deal with the virus fallout.

That would far exceed the 26-trillion-yen stimulus package the government compiled in December last year to ease the impact from the US-China trade war on the export-reliant economy.

A rollback of Japan’s 10 per cent sales tax, proposed by some ruling party lawmakers, is a less likely option because of the time it will take to notify the public and get retailers ready for the new tax rate, two government officials said. The officials spoke on condition of anonymity as they were not authorised to speak publicly.