Japan seems to have the pandemic under control

Japan lifts the state of emergency but advises caution.

Yesterday, Prime Minister Shinzo Abe lifted the state of emergency for 39 out of 47 country prefectures. The decision came ahead of the deadline set to May 31, as the spread of the virus is under control in said areas. Moreover, 39 prefectures have the necessary capacity to provide medical care and perform tests. Among the counties, five are considered exceptional cases, and special caution is required because of the large number of cases: Ibaraki, Ishikawa, Gifu, Aichi, and Fukuoka.

Among others, Tokyo and Osaka – two important metropolitan areas - will continue to be under lockdown until the drop in the number of cases turns constant, and hospitals will be able to manage the situation. To lift the state of emergency all over the country, the number of new cases per 100,000 people must be below 0.5, as it was around March 20 when the country was able to limit the spread of the virus. For the metropolitan areas with around 14 million people, the number of cases per week should be 70 and even lower. But the current numbers don’t look too rosy, yesterday alone having 30 new cases in Tokyo.

But if the state of emergency is lifted, this doesn't mean that the restrictions are over. The government encourages people to avoid travel to and between areas that are still in an emergency state. Also, close contact with others, confined and crowded places are to be avoided.

A silver lining is in sight, as the number of daily new cases is under 100. Still, the prime minister made people aware of the possibility of another outbreak, if they start going out to bars, music houses, and karaoke.

Experts see this change of decision as a way to kick-start the economy, as Japan is close to recession. After a first stimulus package of $990 billion for easing the economic impact of the pandemic, in late-April, the government approved an open-ended solution. Given the current situation, the economic growth will contract by 5%. Until now, the stimulus package represents 20% of Japan's GDP.

Yesterday, Japan225 closed lower by 0.49%.

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Sources: forexlive.com, english.kyodonews.net, asia.nikkei.com