Coronavirus state of emergency has the Japanese staying home, hoarding cash

As the government prepares to extend the emergency beyond February 7, members of the public are waiting it out – and few are spending money

With consumption falling 11.5 per cent in December, businesses are struggling to survive and the economy is taking further blows

Reading Time:4 minutes

People walk across the Shibuya crossing in Tokyo on January 27. Photo: AP

Published: 3:23pm, 28 Jan 2021Updated: 11:18pm, 28 Jan 2021

As Japan prepares to extend its state of emergency beyond February 7, the country’s public is largely resigned to its fate. Most people say they are simply battening down the hatches to get through this latest phase of the Covid-19 pandemic, and looking forward to when they can return to restaurants and bars, shops and malls, or once more go on holiday.

“We have not been out to a restaurant since the pandemic started last year because we just do not want to get ill or spread the virus,” said Judit Kawaguchi, a freelance writer who lives in Tokyo.

“I think it is just best to follow the rules set by the government and stay at home as much as possible. But we have been using this time to make plans on what we are going to do as soon as the state of emergency is lifted. We want to go on a long road trip in Japan with our dogs. I just feel that I need to get out of the house and go somewhere.”

The obvious downside is that few are spending money at the moment, so more businesses are struggling to survive and the national economy is almost certain to slip further into retail recession and deflation. Japan has reported more than 376,000 cases of Covid-19, with 5,388 related deaths.

Government statistics paint a rather bleak picture of the normally free-spending country, with consumption down 4 per cent in November from the same month in 2019. Consumption fell a further 11.5 per cent in December, with spending at restaurants shrinking 36 per cent and takings at izakaya bars down 47 per cent – a particularly bad blow given the higher earnings expected in the run-up to the holiday season.

Volunteers take part in a vaccination simulation at a gymnasium in Kawasaki. Photo: Bloomberg

A Bank of Japan study released in January shows that the situation is likely to worsen, with 70 per cent of households saying they intend to eat and drink at home and save money.

And while savings at Japanese banks rose more than 9 per cent in December to a record 803 trillion yen (US$7.73 trillion), according to HSBC, Suntory Holdings CEO Takeshi Niinami predicted this month that 30 per cent of the nation’s bars and restaurants could go under in the coming months.

Coronavirus state of emergency has the Japanese staying home, hoarding cash

As the government prepares to extend the emergency beyond February 7, members of the public are waiting it out – and few are spending money With consumption falling 11.5 per cent in December, businesses are struggling to survive and the economy is taking further blows

As the government prepares to extend the emergency beyond February 7, members of the public are waiting it out – and few are spending money

With consumption falling 11.5 per cent in December, businesses are struggling to survive and the economy is taking further blows