Japanese companies began to close retail stores, restaurants, movie theaters and offices, while expanding work-from-home policies, after the government declared a state of emergency in major metropolitan areas.
Isetan Mitsukoshi Holdings Ltd., Lumine Co. and Rakuten Inc. are closing stores, while Nintendo Co. said it will shut its flagship Tokyo shop until further notice. Toyo Tire Co. said it would close its headquarters and other operations in Hyogo Prefecture for a month, while workers telecommute. Sega Sammy Holdings Inc. also said it would close all offices in the affected areas for a month, including its main Tokyo site.
Critical businesses in manufacturing and technology will keep operating. Automakers, including Nissan Motor Co. and Honda Motor Co., plan to continue assembly, while Toshiba Corp. affiliate Kioxia Holdings is maintaining normal operations at its Yokkaichi plant, a key producer of memory chips for iPhones and other smartphones. Grocers and convenience stores, including those operated by Seven & i Holdings Co. and Lawson Inc., will remain open so residents can shop for essentials.
The state of emergency declaration affects Tokyo, Osaka and five other prefectures, which together account for about half of the country’s economic output. That’s fueled concern that output will tumble by as much as 20% in the current quarter, driven by an anticipated drop in retail and entertainment.
“A big drop in April-June GDP is unavoidable because the service sector, which accounts for a big chunk of Japan’s economy, will be asked to shut down,” said Yuki Endo, senior economist at the Hamagin Research Institute. “Most of employment in this sector is part-time. Employment conditions for part-time workers will deteriorate greatly.”
Prime Minister Shinzo Abe said in a news conference that if people reduce contact by at least 70% or 80%, in two weeks the increase in infections will peak out, according to experts’ calculations. He called on all office workers to work from home, except for essential services.
Details regarding which businesses will be asked to close will be announced on April 10 and take effect the following day, Tokyo Governor Yuriko Koike said at a briefing on Tuesday.