COVID-19 pandemic in Japan

By:
Japan`s Statistic Bureau of Japan

Tokyo Japan

Febuary 2021
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COVID-19 pandemic in Japan

The COVID-19 pandemic in Japan is part of the worldwide pandemic of

coronavirus disease 2019 (COVID-19) Severe acute respiratory syndrome

coronavirus 2 (SARS-CoV-2) is the virus that causes coronavirus disease 2019

(COVID-19), the respiratory illness responsible for the COVID-19 pandemic.

Colloquially known as simply the coronavirus, it was previously referred to by its

provisional name, 2019 novel coronavirus (2019-nCoV), and has also been called

human coronavirus 2019 (HCoV-19 or hCoV-19). The World Health Organization

declared the outbreak a Public Health Emergency of International Concern on 30

January 2020, and a pandemic on 11 March 2020. SARS-CoV-2 is a

positive-sense single-stranded RNA virus (and hence Baltimore class IV that is

contagious in humans. As described by the US National Institutes of Health, it is

the successor to SARS-CoV-1, the virus that caused the 2002–2004 SARS

outbreak. SARS-CoV-2 is a virus of the species severe acute respiratory

syndrome–related coronavirus (SARSr-CoV). It is believed to have zoonotic

origins and has close genetic similarity to bat coronaviruses, suggesting it

emerged from a bat-borne virus. Research is ongoing as of February 2020 as to

whether SARS-CoV-2 came directly from bats or indirectly through any

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intermediate hosts. The virus primarily spreads between people through close

contact and via respiratory droplets produced from coughs or sneezes. It mainly

enters human cells by binding to the angiotensin converting enzyme 2 (ACE2)..

The transmission route of COVID-19 is made directly between humans through

droplets and respiratory secretions and indirectly through contact with

contaminated surfaces and can also be transmitted by asymptomatic individuals.

The main symptoms of the disease are essentially fever, dry cough and tiredness.

COVID-19 is caused by severe acute respiratory syndrome coronavirus 2

(SARS-CoV-2).

The Japanese government confirmed the country's first case of the

disease on 16 January 2020 in a resident of Kanagawa Prefecture who had

returned from Wuhan, China. This was followed by a second outbreak that was

introduced by travelers and returnees from Europe and the United States between

11 March 2020 and 23 March 2020. According to the National Institute of

Infectious Diseases, the majority of viruses spreading in Japan derive from the

European type while those of the Wuhan type have been disappearing since March.

On 5 October 2020, the number of confirmed coronavirus cases in Japan exceeded

the number of confirmed coronavirus cases in China. At the end of October 2020,
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the number of confirmed cases in the country crossed the 100,000-mark. The

number of confirmed cases in Japan also crossed the 200,000-mark on 22

December 2020 and the 300,000-mark on 14 January 2021 and is on track to cross

the 400,000-mark. At the end of 2020, there were about 230,000 COVID-19 cases

in the country. On 20 January 2021, the number of COVID-19 deaths in Japan

exceeded the number of COVID-19 deaths in China.

The Japanese government has adopted various measures to limit or

prevent the outbreak. On 30 January 2020, former Prime Minister Shinzo Abe

established the Japan Anti-Coronavirus National Task Force to oversee the

government's response to the pandemic. On 27 February 2020, he requested for

the temporary closure of all Japanese elementary, junior high, and high schools

until early April 2020. As the pandemic became a concern for the 2020 Summer

Olympics, the Japanese government and the International Olympic Committee

negotiated its postponement until 2021.

On 7 April 2020, Abe proclaimed a one-month state of emergency for

Tokyo and the prefectures of Kanagawa, Saitama, Chiba, Osaka, Hyogo, and

Fukuoka. On 16 April 2020, the declaration was extended to the rest of the

country for a indefinite period. The state of emergency was lifted in an increasing
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number of prefectures during May 2020, extending to the whole country by 25

May 2020.

Japan's death rate per capita from coronavirus is one of the lowest in the

developed world, despite its aging population. Factors suggested to explain this

include the government response, a milder strain of the virus, cultural habits such

as bowing etiquette and wearing face masks, hand washing with sanitizing

equipment, a protective genetic trait, and a relative immunity conferred by the

mandatory BCG tuberculosis vaccine.

On 16 January 2021, the first anniversary of the beginning of the

pandemic in Japan was commemorated. It was two days after the number of

confirmed cases in the country exceeded 300,000.

Timeline
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The 2020 coronavirus pandemic in Japan can be divided into two waves

based on the genome sequence of the country's COVID-19 virus. The National

Institute of Infectious Diseases (Japan) has determined from its genetic research

that the COVID-19 variant of the first wave is derived from the Wuhan type that

is prevalent in patients from China and East Asia. After entering Japan in January

2020 through travelers and returnees from China, the virus caused numerous

infection clusters across the country before beginning to subside in March.

Japanese medical surveillance confirmed its first case of the virus on 16 January

2020 in a resident of Kanagawa Prefecture who had returned from Wuhan.

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The first wave was followed by a second one that originated from a

COVID-19 variant of the European type that is traced back to early patients from

France, Italy, Sweden, and the United Kingdom. Japanese medical surveillance

detected the second wave on 26 March 2020 when the government's expert panel

concluded the likelihood of a new outbreak caused by travelers and returnees from

Europe and the United States between 11 March 2020 and 23 March 2020. The

NIID has established that the majority of viruses spreading in Japan since March

is the European type. This has led it to conclude that the data "strongly suggests"

that the Japanese government has succeeded in containing the Wuhan variant and

that it is the European variant that is spreading across the country.

In terms of the number of confirmed COVID-19 cases, Japan overtook

China on 5 October 2020. The country also reached the first grim milestone of

100,000 COVID-19 cases at the end of October 2020. On 22 December 2020,

Japan reached the second grim milestone of 200,000 cases. There were also about

230,000 cases in the country at the end of 2020. On 14 January 2021, Japan

reached the third grim milestone of 300,000 cases. Six days later, the country

overtook China in terms of the number of COVID-19 deaths.

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Government response
Phase 1: Containment
The initial response of the Japanese government to the COVID-19

outbreak was a policy of containment that focused on the repatriation of Japanese

citizens from Wuhan, the point of origin of the pandemic, and the introduction of

new border control regulations.

On 24 January 2020, Abe convened the Ministerial Meeting on

Countermeasures Related to the Novel Coronavirus at the Prime Minister's Office

with members of his Cabinet in response to a statement by the World Health

Organization (WHO) confirming human-to-human transmission of the

coronavirus. Abe announced that he would introduce appropriate countermeasures

to the disease in coordination with the NIID.

On 27 January 2020, Abe designated the new coronavirus as an

"infectious disease" under the Infectious Diseases Control Law, which allows the

government to order patients with COVID-19 to undergo hospitalization. He also

designated the disease as a "quarantine-able infectious disease" under the

Quarantine Act, which allows the government to quarantine people suspected of

infection and order them to undergo diagnosis and treatment.

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On 30 January 2020, Abe announced the establishment of the "Novel

Coronavirus Response Headquarters" (新型コロナウイルス感染症対策本部),

which meets at the Prime Minister's Official Residence and is run by a task force

led by Deputy Chief Cabinet Secretary for Crisis Management Okita Yoshiki .The

initial roster of the task force includes 36 high-ranking bureaucrats from several of

the Ministries of Japan. The headquarters acts as the site of Abe's decision-making

process on the country's virus countermeasures.

On 31 January 2020, Abe announced that the government was

prioritizing the repatriation of Japanese citizens from Hubei province. Officials

negotiated with Chinese authorities to dispatch five chartered flights to Wuhan

from 29 January 2020 to 17 February 2020.

On 1 February 2020, the Japanese government enacted restrictions to

deny entry to foreign citizens who had visited Hubei province within 14 days and

to those with a Chinese passport issued from there. On 12 February 2020, it

expanded those restrictions to anyone who had a recent travel history to and from

Zhejiang province or had a Chinese passport issued from there.

On 5 February 2020, Abe invoked the Quarantine Act to place the cruise ship

Diamond Princess under quarantine in Yokohama. Quarantine officers were

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dispatched to the ship to prevent the disembarkation of crew and passengers, and

to escort infected patients to medical facilities.

On 6 February 2020, Abe invoked the Immigration Control and Refugee

Act to deny entry to the cruise ship MS Westerdam from Hong Kong after one of

its passengers tested positive for COVID-19.

Reinforcement of medical service system

After the COVID-19 outbreak on the cruise ship Diamond Princess, the

Japanese government shifted its focus from a policy of containment to one of

prevention and treatment because it anticipated increasing community spread

within Japan. This policy prioritized the creation of a COVID-19 testing and

consultation system based on the National Institute of Infectious Diseases (NIID)

and the government's 83 existing municipal and prefectural public health

institutions that are separate from the civilian hospital system. The new system

handles the transfer of COVID-19 patients to mainstream medical facilities to

facilitate patient flow, triage, and the management of limited testing kits on their

behalf to prevent a rush of infected and uninfected patients from overwhelming

healthcare providers and transmitting diseases to them. By regulating COVID-19

testing at the national level, the Abe Administration integrated the activities of the
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national government, local governments, medical professionals, business

operators, and the public in treating the disease.

On 1 February 2020, the Ministry of Health, Labor and Welfare

instructed municipal and prefectural governments to establish specialized

COVID-19 consultation centers and outpatient wards at their local public health

facilities within the first half of the month. Such wards would provide medical

examinations and testing for suspected carriers of the disease to protect general

hospitals from infection.

On 5 February 2020, Abe announced that the government would begin

preparations to strengthen COVID-19 testing capabilities at the NIID and 83

municipal and prefectural public health institutions that are designated by the

government as official testing sites. Without a uniform diagnosis kit for the

disease, the government has relied on polymerase chain reaction (PCR) tests to

check for infections. As few mainstream medical facilities in Japan can conduct

PCR tests, Abe also promised to increase the number of institutions with such kits,

including universities and private companies.

On 12 February 2020, Abe announced that the government would expand the

scope of COVID-19 testing to include patients with symptoms based on the

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discretion of local governments. Previously, testing was restricted to those with a

history of traveling to Hubei Province. On the same day, the Ministry of Health

and NIID contracted SRL Inc. to handle PCR clinical laboratory testing. Since

then, the government has partnered with additional private companies to expand

laboratory testing capabilities and to work towards the development of a rapid

testing kit.

On 14 February 2020, Abe introduced the government's coronavirus

consultation system to coordinate medical testing and responses with the public.

The Ministry of Health, Labor, and Welfare worked with local governments to

establish 536 consultation centers that covered every prefecture within the country

to provide citizens with instructions on how to receive COVID-19 testing and

treatment. The general public needs to contact a consultation center by phone to

get tested at one of the government's specialized outpatient wards (帰国者・接触

者外来).

On 16 February 2020, Abe convened the government's first Novel

Coronavirus Expert Meeting (新型コロナウイルス感染症対策専門家会議) at

the Prime Minister's Office to draft national guidelines for COVID-19 testing and

treatment. The meeting was chaired by Dr. Wakita Takaji , Director of the NIID,
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who brought together ten public health experts and medical professionals from

across Japan to coordinate a response to the virus with Abe and the government's

coronavirus task force in a roundtable format. The main concern of the Japanese

medical establishment was overcrowding of hospitals by uninfected patients with

light cold symptoms who believed that they had COVID-19. Medical

representatives claimed that such a panic would strain medical resources and risk

exposing those uninfected patients to the disease.

On 17 February 2020, the Ministry of Health, Labor, and Welfare

released national guidelines for COVID-19 testing to each of the municipal and

prefectural governments and their public health centers. It instructed doctors and

public health nurses who staff the consultation centers to limit consultations to

people with the following conditions:

(1) Cold symptoms and a fever of at least 37.5 °C (or need to take antipyretic

medication) for over four days; and

(2) Extreme fatigue and breathing difficulties. The elderly, people with

pre-existing conditions, and pregnant women with cold symptoms can receive

consultation if they have had them for two days.

On 22 February 2020, Health Minister Katsunobu Kato announced that

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the Japanese government was looking into the use of favipiravir, an anti-influenza

medication developed by Fujifilm, to treat patients with COVID-19. The company

responded by increasing production of the drug, providing technical support to

clinical researchers, and distributing the drug to hospitals where its use has been

approved by the government for emergency purposes.

Phase 2: Mitigation
On 23 February 2020, Abe instructed the government's coronavirus task

force to quickly draft a comprehensive basic policy. Health Minister Katsunobu

Katō reconvened the medical experts from the first Novel Coronavirus Expert

Meeting on 24 February 2020 to draft this policy. During the meeting, the medical

establishment presented its policy recommendations in the form of a views report

(新型コロナウイルス感染症対策の基本方針の具体化に向けた見解),

concluding that the most important objective must be the prevention of large-scale

disease clusters and a decrease in outbreaks and deaths. They stated that it would

not be possible for the government to prevent the spread of COVID-19 in Japan

on a person-to-person basis, but that it might be possible to regulate the overall

speed of infection. They cited the next week or two as a "critical moment"

determining whether the country would experience a large cluster that could result
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in the collapse of the medical system and socio-economic chaos. After reviewing

and discussing the existing data on the disease, the committee stated that universal

PCR testing was impossible due to a shortage of testing facilities and providers,

and recommended that the government instead limit the application of available

test kits to patients that are at a high risk of complications to stockpile for a large

cluster. Participants also noted that Japan's medical facilities are vulnerable to

"chaos," noting that many hospital beds and resources in the Tokyo area were

already being used to care for the 700 infected patients from the Diamond

Princess. They reiterated their warning that a rush of alarmed, uninfected

outpatients with light symptoms of the disease could overwhelm hospitals and

turn waiting rooms into "breeding grounds" for COVID-19.

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On 25 February 2020, the Abe Administration introduced the "Basic

Policies for Novel Coronavirus Disease Control" (新型コロナウイルス感染症

対策の基本方針) based on advice from the expert meeting. After a spike of

infections in Italy, Iran, and South Korea, Abe decided that the government's

disease countermeasures would prioritize the prevention of large-scale clusters in

Japan. This included controversial requests to suspend large-scale gatherings such

as community events and school operations, as well as to limit patients with light

cold symptoms from visiting medical facilities to prevent them from

overwhelming hospital resources.

(1) First, the new policies advised local medical institutions that it is better for
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people with mild cold-like symptoms to rely on bed rest at home, rather than

to seek medical help from clinics or hospitals. The policy also recommended

that people at a higher risk of infection – including the elderly and patients

with pre-existing conditions – avoid hospital visits for non-treatment purposes,

such as by ordering prescriptions over the telephone instead of in person.

(2) Second, the new policies allowed general medical facilities in areas of a rapid

COVID-19 outbreak to accept patients suspected of infection. Before this,

patients could only get tested at specialized clinics after making an

appointment with consultation centers to prevent the transmission of the

disease. Government officials revised the previous policy after acknowledging

that such specialized institutions would be overwhelmed during a large cluster

(3) Third, the policy asked those with any cold symptoms to take time off from

work and avoid leaving their homes. Government officials urged companies to

let employees work from home and commute at off-peak hours. The Japanese

government also made an official request to local governments and businesses

to cancel large-scale events.

On 27 February 2020, Abe requested the closure of all schools from 2

March 2020 to the end of spring vacations, which usually conclude in early April.
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The next day, the Japanese government announced plans to create a fund to help

companies subsidize workers who need to take days off to look after their children

while schools are closed.

On 27 February 2020, the Japanese government also announced plans to

expand the national health insurance system so that it covers COVID-19 tests.

On 9 March 2020, the Ministry of Health reconvened the Expert Meeting after the

two weeks "critical moment." The panel of medical experts concluded that Japan

was currently not on track to experience a large-scale cluster, but stated that there

is a two-week time lag in analyzing COVID-19 trends and that the country would

continue to see more infections. Consequently, the participants asked the

government to remain vigilant in quickly identifying and containing smaller

clusters. With more COVID-19 outbreaks around the world, the panel also

proposed that new infections from abroad could initiate a "second wave" of the

disease in Japan.

On 9 March 2020, the Health Ministry published a disease forecast for

each prefecture and instructed local governments to prepare their hospitals to

accommodate their patient estimates. It predicts that the virus peak in each

prefecture would occur three months after the first reported case of local
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transmission. The Ministry estimates that at the peak Tokyo would see 45,400

outpatients and 20,500 inpatients per day, of whom 700 will be in severe condition.

For Hokkaido, the figure is 18,300 outpatients and 10,200 inpatients daily, of

whom about 340 will be in severe condition.

State of Emergency declaration

On 5 February 2020, the Abe Administration's coronavirus task force

initiated a political debate on the introduction of emergency measures to combat

the COVID-19 outbreak a day after the British cruise ship Diamond Princess was

asked to quarantine. The initial debate focused on constitutional reform due to the

task force's apprehension that the Japanese Constitution may restrict the

government's ability to enact such compulsory measures as quarantines on the

grounds that it violated human rights. After lawmakers representing almost all of

the major political parties – including the Jimintō, Rikken-minshutō, and

Kokumin-minshutō – voiced their strong opposition towards this proposal and

asserted that the Constitution allowed for emergency measures, the Abe

administration moved forward with legislative reform instead.

On 5 March 2020, Abe introduced a draft amendment to the Special

Measures Act to Counter New Types of Influenza of 2012 to extend the law's
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emergency measures for an influenza outbreak to include COVID-19. He met

separately with the heads of five opposition parties on 4 March 2020 to promote a

"united front" in passing the reforms. The National Diet passed the amendment on

13 March 2020, making it effective for the next two years. The amendment allows

the Prime Minister to declare a "state of emergency" in specific areas where

COVID-19 poses a grave threat to the lives and economic livelihood of residents.

During such a period, governors of affected areas will receive the following

powers: (1) to instruct residents to avoid unnecessary outings unless they are

workers in such essential services like health care and public transportation; (2) to

restrict the use or request the temporary closure of businesses and facilities,

including schools, social welfare facilities, theatres, music venues, and sports

stadiums; (3) to expropriate private land and buildings to erect new hospitals; and

(4) to requisition medical supplies and food from companies that refuse to sell

them, punish those that hoard or do not comply, and force firms to help transport

emergency goods.

Under the law, the Japanese government does not have the authority to

enforce citywide lockdowns. Apart from individual quarantine measures, officials

cannot restrict the movement of people to contain the virus. Consequently,

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compliance with government requests to restrict movements is based on "asking

for public cooperation to ‘protect people’s lives’ and minimize further damage to

[the economy]".

On 25 March 2020, the Ministry of Health, Labor and Welfare announced

that the daily number of confirmed cases in Tokyo increased from 17 to 41 cases

compared to the day before. Tokyo Governor Yuriko Koike held an emergency

press conference in the late afternoon, stating that "the current situation is a

serious situation where the number of infected people may explode." She

requested residents to refrain from nonessential outings during the upcoming

weekend.

On 26 March 2020, the Ministry of Health reconvened the Novel

Coronavirus Expert Meeting to review the new data. The panel of medical experts

concluded that there was a "high probability of an expansion of infections" within

the country due to an increase in the number of infected patients returning from

Europe and the United States between 11 March 2020 and 23 March 2020. In

response to the statement, Abe instructed Economic Policy Minister Yasutoshi

Nishimura to establish a special government task force to combat the spread of the

virus. The move cleared a prerequisite toward declaring a state of emergency

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because any request for one by the Prime Minister would have to be approved by

such a task force under the revised law.

On 30 March 2020, Koike requested residents to refrain from

nonessential outings for the next two weeks due to a continued increase in

infections in Tokyo. During a press conference held by the Japan Medical

Association that same day, Kamayachi Satoshi of the government's panel of

medical experts stated that his fellow panelists were divided over whether Abe

should declare a state of emergency.

On 1 April 2020, the Ministry of Health reconvened the Novel

Coronavirus Expert Meeting to assess the current COVID-19 situation in Japan.

The medical experts discussed the data and concluded that although such urban

areas as Tokyo and Osaka were witnessing a rapid increase in infection rates, they

were not on a trajectory to experience a large-scale cluster seen in Europe and the

United States. Experts were still concerned that infected patients could overwhelm

the medical service system before an explosive spread of the virus as COVID-19

designated hospitals in major cities reached near capacity. They requested the

government to secure more hospital beds for patients and transfer those with mild

or no symptoms to outside housing facilities。

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On 2 April 2020, the Ministry of Health issued a notice that urged

non-critical COVID-19 patients to move out of hospitals and stay at home or

facilities designated by local governments。Prefectural governors across the

country began arranging accommodation for such patients through hotel operators

and dormitories and issued official requests to the Japan Self-Defense Force for

transportation services.

On 3 April 2020, Professor Nishiura Hiroshi of the Ministry of Health's

Cluster Response Team presented the initial findings of his COVID-19

epidemiological models to the public. He concluded that the government could

prevent an explosive spread of the virus in Japan if it adopted strict restrictions on

outings that reduced social interactions by 80 percent, while such a spread would

occur if the government adopted no measures or reduced social interactions by

only 20 percent. Nishiura added that Tokyo was about 10 days to two weeks away

from a large-scale outbreak.

On 7 April 2020, Abe proclaimed a one-month state of emergency from 8

April to 6 May for Tokyo and the prefectures of Kanagawa, Saitama, Chiba,

Osaka, Hyogo and Fukuoka. He stated that the number of patients would peak in

two weeks if the number of person-to-person contacts was reduced by 70 to 80

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percent, and urged the public to stay at home to achieve this goal.

On 10 April 2020, Koike announced closure requests for six categories of

businesses in Tokyo. They include amusement facilities, universities and cram

schools, sports and recreation facilities, theatres, event and exhibition venues. and

commercial facilities. She also asked restaurants to limit opening hours to

between 5 a.m. and 8 p.m. and to stop serving alcohol at 7 p.m. The request was to

take effect on 12 April 2020 and promised government subsidies for businesses

that cooperated with it.

On 11 April 2020, Professor Nishiura presented the remaining findings of

his COVID-19 epidemiological models. He determined that reducing social

interactions by 80 percent would decrease the COVID-19 infection rate to a

manageable level in 15 days; by 70 percent in 34 days; by 65 percent in 70 days;

and by 50 percent in 3 months. Any rate below 60 percent would increase the

number of cases.

On 16 April 2020, Abe expanded the state of emergency declaration to

include every prefecture within the country. Later on 4 May 2020, Abe said that

Japanese Cabinet would expand the state of emergency declaration until end of

May 2020. Then on 14 May 2020, Abe and his cabinet declared that Japanese
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Government decided to relieve the state of emergency declaration, excluding 8

prefectures like Tokyo, Kyoto Prefecture. Some media expressed doubts about

why only some of the easing standards were released under the name of

comprehensive judgment.

On 21 May 2020, the state of emergency is suspended in 3 prefectures in

Kinki after they had cleared the threshold of having new infections below 0.5 per

100,000 people in the past week, resulting a total of 42 out of the 47 prefectures to

be out of the state of emergency while 5 prefectures, such as Saitama, Kanagawa,

Hokkaido, are waiting for lifting decision on 25 May 2020.

Novel Coronavirus Expert Meeting

On 16 February 2020, Abe convened the Novel Coronavirus Expert Meeting to

incorporate members of the Japanese medical community into his

decision-making process. The panel acts as the main medical advisory body of the

Japanese government during the COVID-19 crisis

Chair

•Wakita Takaji (Director-General of the NIID)

Vice Chair

•Omi Shigeru (President of the Japan Community Health Care Organization

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Members

• Okabe Nobuhiko (Director of the Kawasaki Municipal Institute of Public

Health)

• Oshitani Hitoshi (Former Infectious Disease Control Advisor at the WHO

Western Pacific Regional Office)

• Kamayachi Satoshi (Executive Board Member of the Japan Medical

Association)

• Kawaoka Yoshihiro (Professor of Virology at the University of

Wisconsin-Madison and University of Tokyo)

• Kawana Akihiko (Professor of Internal Medicine at the National Defense

Medical College)

• Suzuki Motoi (Director of the NIID Center of Infectious Disease

Epidemiology)

• Tateda Kazuhiro (Professor of Microbiology and Infectious Disease at Toho

University)

• Nakayama Hitomi (Social Worker and Lawyer at the Kasumigaseki-Sogo

Law Offices)

• Muto Kaori (Professor of Cultural and Human Information Studies at the

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University of Tokyo)

• Yoshida Masaki (Professor of Internal Medicine at Jikei University School of

Medicine

Government support measures

On 12 February 2020, Abe announced that the government would secure

500 billion yen for emergency lending and loan guarantees to small and medium

enterprises affected by the COVID-19 outbreak. He also declared that his Cabinet

would set aside 15.3 billion yen from contingency funds to facilitate the donation

of isolated virus samples to relevant research institutions across the globe.

On 1 March 2020, Abe evoked the Act on Emergency Measures for

Stabilizing Living Conditions of the Public to regulate the sale and distribution of

facial masks in Hokkaido. Under this policy, the Japanese government instructed

manufacturers to sell facial masks directly to the government, which would then

deliver them to residents. On 5 March 2020, the Japanese government announced

that it is organizing an emergency package by using a 270 billion yen ($2.5

billion) reserve fund for the current fiscal year through March to contain the virus

and minimize its impact on the economy

Three Cs (3 つの密, Mittsu no Mitsu, "Three 'Close's"), also written

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Three C's or 3 密 (San Mitsu), is a slogan originated by the Japanese government

in 2020 in combating the COVID-19 pandemic. The Three Cs were announced by

the office of the Prime Minister of Japan on Twitter on 17 March 2020. This

followed work by the Ministry of Health, Labour and Welfare on how to prevent

superspreader events and other clusters (クラスター), including the 25 February

2020 establishment of a Cluster Countermeasures Group within the ministry. The

slogan warns people to avoid three factors that contribute to clusters of infection:

Closed spaces (密閉) with poor ventilation; Crowded places (密集) with many

people nearby; and Close-contact settings (密接) such as close-range

conversations. On 16 July 2020, the World Health Organization (WHO) posted a

recommendation to "Avoid the Three Cs", in terms very similar to those used in

English by the Japanese government.

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Controversies and criticism

On 17 February 2020, the Ministry of Health, Labor and Welfare asked

that those who have experienced fever over 37.5 °C for more than four days, in

addition to those who experience severe symptoms such as lethargy and difficulty

breathing, consult with the Return and Contact Consultation Centers immediately
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to determine whether testing is required. However, some media outlets asserted

that restrictive standards for testing would delay public health response to the

pandemic, resulting in further spread of the disease.

In early February, Masahiro Kami, a hematologist, chairman of the

Institute for Healthcare Governance, and outside director of SBI Pharmacy Co.,

Ltd. and SBI Biotech Co., Ltd., criticized Japan's response to outbreaks of the

disease onboard isolated cruise ships compared to that of Italy.

In late February, several Japanese media outlets reported that there were

people with fever or other symptoms who could not be tested through the

consultation center system and had become "test refugees" (Japanese: 検査難民).

Some of these cases involved patients with severe pneumonia. Hematologist

Masahiro Kami claimed that many patients were denied testing due to their mild

symptoms and criticized the Japanese government for setting testing standards

that were too high and for lacking a response to patient anxiety.

On 26 February 2020, the Minister of Health Katsunobu Kato stated in

the National Diet that 6,300 samples were tested between 18 and 24 February,

averaging 900 samples per day. Some representatives questioned the discrepancy

between the actual number of people tested and the claim in the prior week that
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3,800 samples could be tested per day.

On the same day, more doctors reported that public health centers had

refused to test some patients. The Japan Medical Association announced that it

would start a nationwide investigation and plan to cooperate with the government

to improve the situation. The Ministry of Health also stated that it would look into

the situation with the local governments.

The strict constraints on testing for the virus by Japanese health

authorities drew accusations from critics such as Masahiro Kami that Abe wanted

to "downplay the number of infections or patients because of the upcoming

Olympics." It was reported that only a few public health facilities were authorized

to test for the virus, after which the results could only be processed by five

government-approved companies, which created a bottleneck forcing clinics to

turn away even patients with high fevers. This has led some experts to question

Japan's official case numbers. For example, Tobias Harris, of Teneo Intelligence in

Washington, D.C., said: "You wonder, if they were testing nearly as much as

South Korea is testing, what would the actual number be? How many cases are

lurking and just aren't being caught?" Fact-checking in several media later proved

that the news that the government had reduced the number of tests to curb the
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increase in the number of infected people for the Olympics was not accurate at all.

Testing was still restricted to large hospitals in March 2020, with 52,000 tests, or

16% of the South Korean amount, performed that month. A decision to expand

testing was made on 13 April 2020. There were many articles in March that

criticized the number of PCR tests in Japan as very small compared to South

Korea. According to data released by the Ministry of Health, Labor and Welfare,

Japanese authorities conducted a total of 15,655 PCR tests as of 17 March 2020,

excluding tests conduct on those returning from China by charter flights and

passengers on cruise ships.

On 5 March 2020, Japan announced that it will strengthen quarantine for

new entrants from China and South Korea, along with added areas of Iran to the

target area. The Chinese government showed understanding for the decision,

while the Korean government called the measures implemented by Japan

"unreasonable and excessive."

Various problems are arising in connection with the Emergency

Supplementary Income policies promoted by the Japanese government. At first,

there were many obstacles to the rapid driving force as the 300,000 yen per

household policy was changed to the 100,000 yen per population policy. In
 32

addition, some uncomfortable parts make it easier to evaluate postal delivery

applications faster than online applications. In the case of postal delivery, it is

possible to apply for each household more smoothly, but when applying online,

separate paperwork for inspection is required for each local government office. In

addition, since the application process for management subsidies is complicated,

there are also side effects of financial disadvantages for small business owners

and individual business owners. The reason why the shortage of masks was

difficult to eliminate and it took a long time to receive the benefits, was that the

Individual Number system, which was well known as "My Personal ID Card

Number System", was only used by about 16% of the population, meanwhile most

of the work could be handled without Individual Number system due to people's

hesitation against the privately problematic policy which gets into a troublesome

settlement for protection of private problem without the supervision of the

government. The Individual Number is a system for the administration to identify

individuals. Due to opposition from the opposition party and liberals who say that

the national and local governments will get to know personal information, the

Individual Number has not spread easily and is not obligatory to link with other

personal information such as bank accounts. On this topic, Representative Sanae

 33

Takaichi who leads Ministry of Internal Affairs and Communications commented

that they are considering to connect every single personal ID card Number and

each single bank account for comfort usage of every citizen.

Moreover, Prime Minister Abe's cloth mask distribution policy is also

problematic, leading to a lack of clarity in budgeting. Furthermore, one of the

companies involved in mask production is suspected of ghost companies. Besides,

the problem of maintaining quality, which was the trigger, remains under the

government's burden, and the issue of tax waste is pointed out. The company that

was suspected to be a dummy company in some media was a broker of a sole

proprietor, and he had masks manufactured in Vietnam using locally procured

materials and imported them. Originally, he was promoting masks to Fukushima

and Yamagata prefectures, but the Ministry of Health and Welfare, who had

trouble finding a mask supplier due to a sudden decision, bought them. Not only

he, but also people and companies who were reported suspicious in the media or

were rumored on social media were slandered online, and there were many

nuisances to the company and their homes.

Likewise, several news reports showed signs of missing numbers of

infection statistics in Japan could be explained by other sources of statistics.

 34

Furthermore, there would be differences among several statistics of departments

since there were several standards for statistics among regional directors and

departments of Japanese Authorities using those statistics with other standards. As

a result, despite the low death rate, there was some doubt that there would be

missing fatality cases for COVID-19 pandemic among Japan due to low

credibility of statistics in Japan as well as some medical professionals and media

outlets have criticized the Japanese government for under-testing for COVID-19.

Medical response

The medical task-force advising the government, known as the Novel Coronavirus

Expert Meeting, has adopted a three-pronged strategy to contain and mitigate

COVID-19 that includes:

(1) Early detection of and early response to clusters through contact tracing;

(2) Early patient diagnosis and enhancement of intensive care and the securing of

a medical service system for the severely ill; and

(3) Behavior modification of citizens.

Medical experts have prioritized COVID-19 testing for the first two purposes

while relying on the behavior modification of citizens rather than mass testing to
 35

prevent the spread of the virus at a large-scale level.

Contact tracing against clusters

On 25 February 2020, the Ministry of Health, Labour and Welfare

established the Cluster Response Team (クラスター対策班) in accordance with

the Basic Policies for Novel Coronavirus Disease Control. The purpose of the

section is to identify and contain small-scale clusters of COVID-19 infections

before they grow into mega-clusters. It is led by university professors Oshitani

Hitoshi and Nishiura Hiroshi and consists of a contact tracing team and a

surveillance team from the National Institute of Infectious Diseases (NIID), a data

analysis team from Hokkaido University, a risk management team from Tohoku

University, and an administration team. Whenever a local government determines

the existence of a cluster from hospital reports, the Ministry of Health dispatches

the section to the area to conduct an epidemiological survey and contact tracing in

coordination with members of the local public health center. After the teams

determine the source of infection, the ministry and local government officials

enact countermeasures to locate, test, and place under medical surveillance

anybody who may have come into contact with an infected person. They can also

file requests to suspend infected businesses or restrict events from taking place
 36

there.[

From its contract tracing findings, the Ministry of Health discovered that

80% of infected people did not transmit COVID-19 to another person. The

Ministry also determined that patients that did infect another person tended to

spread it to multiple people and form infection clusters when they were in certain

environments. According to one of the experts, Kawaoka Yoshihiro, "[This meant

that] you don’t need to trace every single person who’s been infected if you can

trace the cluster. If you do nothing, the cluster will grow out of control. But as

long as you identify a cluster small enough to contain, then the virus will die out."

On 9 March 2020, the medical experts reviewed the data from the Cluster

Response Team's work and further refined its definition of a high-risk

environment as a place with the overlapping "three Cs" (three close-contact

situations (Japanese: 三つの密, Hepburn: mittsu no mitsu)): (1) closed spaces

with poor ventilation; (2) crowded places with many people nearby; and (3)

close-contact settings such as close-range conversations. They identified gyms,

live music clubs, exhibition conferences, social gatherings, and yakatabune as

examples of such places. The experts also theorized that crowded trains did not

form clusters because people riding public transportation in Japan usually do not
 37

engage in conversations.

During times when the number of infected patients rises to such an extent

that individual contract tracing alone cannot contain a COVID-19 outbreak, the

government will request the broad closure of such high-risk businesses.

Reinforcement of the medical system

During the initial stages of the outbreak, medical experts recommended

the government to focus on COVID-19 testing for contact tracing purposes and

patients with the following symptoms: (1) cold symptoms and a fever of at least

37.5 °C (or need to take antipyretic medication) for over four days; and (2)

extreme fatigue and breathing difficulties. The elderly, people with pre-existing

conditions, and pregnant women with cold symptoms could be tested if they had

them for two days. The country's high number of computed tomography (CT)

scanners (111.49 per million people) allows them to confirm suspicious

pneumonia cases and begin treatment before testing them for COVID-19.]

On 1 April 2020, medical experts requested the government to secure more

hospital beds for patients and transfer those with mild or no symptoms to outside

housing facilities to focus treatment on the severely-ill.

Behavior modification of citizens

 38

The Japanese government's medical task-force anticipates multiple waves of

COVID-19 to arrive in the country for at least the next three years, with each one

prompting the public to engage in a cycle of restricting and easing movement.

Under the current law, the Prime Minister can restrict movement by declaring a

"state of emergency" in specific areas where COVID-19 poses a grave threat to

residents. During such periods, the governors of affected areas can request citizens

to avoid unnecessary outings and temporarily close certain businesses and

facilities. Since the government cannot enact compulsory measures to enforce

these requests, it has instead embarked on a social engineering program to train its

citizens to comply with them on a voluntary basis during current and future state

of emergencies.

To reduce person-to-person contact, the government has instructed the public to

refrain from going to high-risk environments (the Three Cs: closed spaces,

crowded places, and close-contact settings) and events involving movement

between different areas of the country. It emphasized extreme caution when

coming in contact with the elderly. The government also promoted such

work-style reforms as teleworking and staggering commuting hours, while

improving the country's distance learning infrastructure for children.

 39

On 4 May 2020, the Ministry of Health, Labor and Welfare unveiled its program

to create a "new lifestyle" (新しい生活様式) for the country's citizenry that is to

be practiced every day on a long-term basis. Several elements of the lifestyle

include behavior changes demanded under the state of emergency, such as

avoiding high-risk environments and long-distance travelling. However, the

program expands these precautions to cover more mundane activities by

requesting people to engage in such activities as wearing masks during all

conversations, refraining from talking when using public transportation, and

eating next to one another rather than facing one another.

Regional developments

The following are examples of the spread of infections for five of the eight

regions in Japan.

Hokkaido
Hokkaido was identified in Hokkaido on 28 January 2020, and the first case of an

infected person in Hokkaido was on 14 February 2020. To limit the spread of

infection, the governor of Hokkaido, Naomichi Suzuki, announced the

Declaration of a New Coronavirus Emergency on 28 February 2020, calling on

locals to refrain from going out.

 40

Tohoku
The Tōhoku region has been relatively unaffected. As of 10 July 2020, Iwate

prefecture has not reported any cases.

Kanto
On 13 February 2020, three confirmed cases were announced in the Kanto region,

and one case was confirmed in each of Kanagawa, Tokyo, and Chiba. On 6 March

2020, it was confirmed that 121 infected people were reported in 5 prefectures,

including Tochigi and Saitama. On 21 March 2020, a total of 136 people were

identified as infected in Tokyo, and a total of 311 people were confirmed in the

Kanto region.

Aichi
The first case was identified in Aichi on 26 January 2020, and the first case of an

infected person in Aichi was on 14 February 2020. As the virus spread, Governor

Omura of recognized that there were two clusters in the prefecture, mainly in

Nagoya. He emphasized the need to work with the Nagoya City Government to

prevent the spread of infection.

Kansai
The Osaka model (Japanese: 大阪モデル, Hepburn: Ōsaka moderu) of

self-restraint (自粛, Jishuku) has been widely praised in Japan. The proactive
 41

measures enacted by Governor Yoshimura in Osaka prefecture have been effective

in mitigating the effects of the pandemic compared to other regions of Japan with

minimal disruptions to education or the economy. Governors of other prefectures

have followed this example. As the second-largest population center in Japan with

the highest population density in the Kansai region, this has been effective to

reduce the spread of the virus in this region. Reduced international tourism to

Kyoto due to travel restrictions and cancellations of tour groups has also reduced

the spread of the virus but the tourism sector is struggling as a result.

Kyushu
On 24 May 2020, Fukuoka Prefecture announced a total of four confirmed cases,

including one re-positive case confirmed in Fukuoka City, and three infected cases

related to Kitakyushu City. Unfortunately for Kyushu, Kagoshima announced on 2

July 2020 that it has newly confirmed the infection with coronavirus in 9 men and

women. On the other hand, Fukuoka Prefecture announced on the 2nd that four

new coronavirus infections were confirmed. In August 2020, Fukuoka remained

most seriously affected with nearly four thousand cases and over forty deaths. By

January 2021, cases in Fukuoka had risen to over 13,000 and 150 deaths.
 42

Economic problem

A month long state of emergency planned by the government to contain a

resurgence of novel coronavirus infections is expected to knock trillions of yen off

private consumption, with some economists predicting the economy will return to

contraction.Japan’s economy is expected to make its sharpest rebound in decades

this year, with consumption set to pick up toward the end of 2021 as the impact of

the COVID-19 pandemic on the broader economy eases.

The world’s third largest economy is projected to grow 3.42% in the next

fiscal year, which will run to March 2022, after shrinking 5.37% this fiscal year,
 43

according to an average of forecasts by 35 economists polled by the Japan Center

for Economic Research.

If the estimate is borne out, it would see a turnaround from the

economy’s worst contraction to its highest growth since fiscal 1995, when

comparative date became available. The expected economic impact of a state of

emergency in Tokyo and three neighboring prefectures, which the government of

Prime Minister Yoshihide Suga is considering declaring on Thursday, will likely

be smaller than those seen after the first emergency declaration in April last year

in Tokyo and six prefectures.

The declaration then was later expanded to the entire nation and fully

lifted in late May. Expected restrictions this time, though not legally binding and

limited in geographical reach, could still wipe out a significant part, if not all, of

the growth previously expected in the January to March quarter, economists said.

An economic slowdown in the capital could have a ripple effect, and

there is even a possibility that the planned state of emergency will be expanded,

they said.

Tokyo reported more than 1,200 new coronavirus infections, with a

record-high 111 COVID-19 patients in serious condition. It was the

 44

second-highest figure for the capital, after 1,337 cases reported on Dec. 31.

“The situation has been getting worse, and if the areas and the period of the

declaration are extended, the percentage of the GDP shrinkage in the current

quarter could be a double-digit one,” said Shinichiro Kobayashi, a senior

economist at Mitsubishi UFJ Research and Consulting Co.

“In that case, the repercussions would materialize not only in the form of

consumption falls but corporate bankruptcies and increased unemployment,”

Kobayashi said. “That means Japan’s economy could fall into a vicious cycle of

deterioration in employment and income levels.”

Kobayashi had last month predicted an annualized real 0.5% contraction

in Japan’s economy in the first quarter of 2021 due to the virus resurgence.

With the first state of emergency prompting people to refrain from nonessential

outings and a range of businesses to cut operating hours, Japan’s gross domestic

product contracted an annualized real 29.2% in the April to June period from the

previous quarter. As economic activities restarted gradually after the emergency

was fully lifted, the economy showed a sharp rebound in the following quarter,

growing an annualized 22.9%.

According to the average forecast of 35 economists polled in December

 45

by the Japan Center for Economic Research, the economy was projected to grow

an annualized 1.31% in the January-March term following 3.44% growth in the

quarter to December. Takahide Kiuchi, executive economist at the Nomura

Research Institute, said about ¥4.89 trillion ($47.5 billion) of domestic

consumption is estimated to disappear due to the state of emergency declaration

for the Tokyo area, pushing down the nation’s annual GDP by 0.88 percentage

point.

The estimate is based on an assumption that 55.8% of the country’s

private consumption is not of an essential or urgent nature as shown by the

government’s household spending data, Kiuchi said. Although private spending

projected to be lost would be smaller than the estimated loss of ¥10.7 trillion last

April and ¥11.2 trillion the following month, Kiuchi said the planned state of

emergency could be expanded to nationwide in stages, knocking ¥14.0 trillion off

consumption per month, or pushing down the annual GDP by 2.53 percentage

points.

Hideo Kumano, chief economist at the Dai-ichi Life Research Institute,

predicts the expected economic impact to be ¥2.8 trillion, assuming restrictions

last for 50 days, almost the same as the first emergency declaration.
 46

Even if the target area is limited only to Tokyo and its vicinity, economic

activities in different areas interact and almost all other regions in Japan will be

affected,” Kumano said.

Socio-economic impact

Abe said that "the new coronavirus is having a major impact on tourism,

the economy and our society as a whole”, throwing Japan into a recession. In Q1

2020 GDP there was 0.9 contraction, whereas in Q4 2019 GDP there was 1.9

contraction. Face masks have sold out across the nation and new stocks are

quickly depleted. There has been pressure placed on the healthcare system as

demands for medical checkups increase. Chinese people have reported increasing

discrimination.

Due to the COVID-19 pandemic, logistics and supply chains from

Chinese factories have been disrupted, leading to complaints from certain

Japanese manufacturers. Abe considered using emergency funds to mitigate the

outbreak's impact on tourism, 40% of which is by Chinese nationals. S&P Global

noted that the worst-hit stocks were for travel, cosmetics and retail companies,

which are most exposed to Chinese tourism. Video game developer Nintendo
 47

issued a statement apologizing for delays in shipments of Nintendo Switch

hardware, attributing it to the coronavirus outbreak in China, where much of the

company's manufacturing is located. On the same day the Nagoya Expressway

Public Corporation announced plans to temporarily close some toll gates and let

employees work from their homes after an employee staffing the toll gates was

diagnosed positive for SARS-CoV-2. Due to personnel shortages, six toll gates on

the Tōkai and Manba routes of the expressway network were closed over the

weekend.

Export & Import

The data from Japan’s ministry of finance shows that Japan’s exports fell

by 11.70 per cent in the current year till March compared with a 10.10 per cent

decrease expected by economists in a Reuter’s poll. According to Takeshi Minami,

chief economist at Norinchukin Research Institute, the impact of COVID-19 is

going to continue through this year which would hinder the economic activity

from normalizing. Japan’s exports to China, its largest trading partner, have

declined by 8.70 per cent in the year till March, reflecting a slump in items
 48

including textiles and apparels.

Japanese shipments to Asia, contributing to more than half of Japanese

exports, declined by 9.40 per cent, and exports to the EU fell by 11.10 per cent

due to the global spread of COVID-19. Imports fell 5 per cent in March, versus

the median estimate for a 9.80 per cent decline.

Japan's total exports have moved down by 23 per cent in April and

imports have fallen by 7 per cent from the same period a year earlier, according to

data released by the finance ministry. Exports to the US plummeted by 38 per cent,

while imports rose by 1.60 per cent. Japan's exports to the EU tumbled by 28 per

cent in April, while imports from the region declined by 7 per cent.

Exports to China slipped by 4 per cent in April 2020 and imports from China

jumped by 12 year-on-year. The overall exports totaled $48 billion, down from

nearly $62.56 billion in the same month in 2019. Imports dropped to $57 billion

from $61.63 billion, with major fall in exports of vehicles, machinery, chemicals

and textiles.

From the perspective of market share, the proportion of China’s share in

Japanese textile and apparel import market has gradually declined in recent years,

with the proportion of quantity falling to 47.20 per cent. The market shares of
 49

Vietnam, Indonesia, Thailand and Bangladesh have gradually increased.

Japan’s Textiles and Apparel Trade

According to the data from Japan’s ministry of finance, the country’s

textile and apparel imports in March declined by 2 per cent year-on-year to

216,500 tons. Of these, imports from China declined by 4 per cent to 105,300 tons.

In the first quarter, Japanese textile and apparel imports totaled 605,000 tons,

down by 7.50 per cent year-on-year. In case of volume, the imports from China

totaled 286,000 tons, declining by 13.10 per cent year-on-year.

Notable Rise in Demand of Textiles and Apparels of Japan in

April 2020

As per the the data from Japan’s ministry of finance, Japan imported

about 243,000 tons of textiles and apparel in April 2020, up by 8.80 per cent y-o-y

and 12.30 per cent m-o-m. In case of China, import volume was 140,000 tons, up

by 21.50 per cent y-o-y and 32.90 per cent m-o-m.

During January to April 2020, Japan's cumulative textile and apparel

imports reached 848,000 tons, down by 3.40 per cent y-o-y, and that from China

was 426,000 tons, down by 4.10 per cent y-o-y.

Japan’s Textiles and Apparel Import Volume and Value

 50

In terms of value, import of Japan’s textile and apparel in April 2020

showed an increase of 29.30 per cent m-o-m and that from China dropped
by 72.90 per cent m-o-m. Japan’s textile and apparel import demand in
April was strong, and that from China has grown rapidly.

China is the largest supplier of Japan for textile and apparels, followed by
Vietnam, Indonesia, Thailand, etc. In April 2020, China contributed 57.50
per cent of the Japan's textile and apparel import market, up by 6.10 per
cent from the same period last year and 8.90 per cent m-o-m.

Japan's Textiles and Apparels Imports

 51

An extreme rise has been observed in Japan’s import of textiles and apparels from

China in April 2020. According to the midstream and downstream of the Chinese

market, the number of masks exported from China to Japan increased evidently in

April 2020. According to statistics, the product group with HS 6307900 accounted

for the largest.

Changes of Japan’s Textile and Apparel Imports by Countries

and Regions
 52

Japan’s Support to Shift the Production outside China, preferably ASEAN

On April 19, Japan’s PM had declared a state of emergency for the

coronavirus pandemic and unveiled a massive stimulus package to help the

economy and overcome the crisis caused by the spread of COVID-19.

Japan has allotted a massive rescue package of $992 billion to promote

business which is approximately 2.7 times Malaysia’s GDP (gross domestic

product) and 20 per cent of Japan’s GDP, biggest in the country’s history. This

package was aimed at mitigating the economic and social impact of the pandemic

and target individuals, multinational corporations and small and medium-sized

enterprises (SMEs).

The package includes an economic support fund worth about $2.4 billion
 53

to help finance local businesses bringing manufacturing back to Japan from China,

or to move it to other countries in Southeast Asia and South Asia. The move is

aimed at reducing future risks of supply chain disruption in case of another black

swan. Approximately $2.05 billion have been allotted for companies shifting

production back to Japan and $219.52 million for those planning to move to other

countries.

According to a February survey by Tokyo Shoko Research Ltd, approximately 37

per cent of the 2,600 respondents were diversifying procurement outside of China

during the pandemic. The trend to relocate manufacturing both of low and

high-added value products outside of China is mainly a move to manage risk and

prevent supply chain disruptions in case of major natural disasters, infectious

disease outbreaks and trade wars among major economies.

Investor sentiment was bolstered in the country in May by hopes that the

Japanese government may move ahead with lifting some coronavirus-linked

restrictions in some parts of the country. Among the sectors, textiles & apparels

remain as notable gainers in stock market.

Japan’s Imports of Products with HS Code 6307900 from China

 54

Japan’s import volume for the products of HS code 6307900 (including

masks) was 25.20 kilo tons in April 2020, up by 165.26 per cent y-o-y, 236 per

cent m-o-m, accounting for 18.01 per cent of the total textiles and apparels.

Imports from China moved up by 6.70 per cent compared with the same period of

last year, indicating that the variety was a hotspot imported by Japan in April 2020.

Approximately more than 90 per cent came from China. According to some

downstream exporters, cotton gauze masks contributed for the maximum share in

the total.

Thus, Japan’s textile and apparel imports increased significantly in April

2020 mostly from China. The products of HS code 6307900 contributed greatly in

Japan’s imports. Imports of products of HS code 6307900 accounted for 10.40 per
 55

cent of the total textile and apparel imports, and the value reached 26.30 per cent.

Fast Retailing, a big domestic player for textiles and apparels, has

planned to sell face masks made from highly breathable and fast-drying materials

to deal with the spread of Covid-19 at their Uniqlo casualwear store chain and on

its online shopping platform.

FTA with the UK under Negotiation

Japan is in negotiation with Britain for FTA (Free Trade Agreement), based on the

existing EU-Japan Economic Partnership Agreement (EPA). This would increase

the trade flows between the two countries by approximately $18.60 billion,

according to Department of International Trade (DIT), UK. The manufacturers of

textiles and clothing are expected to be among the biggest winners of lowering

trade barriers.

Sporting Events

Impact of the COVID-19 pandemic on the 2020 Summer Olympics

On 2 March 2020, the Tokyo Organizing Committee (TOCOG) released a

statement saying that preparations for the upcoming Tokyo Olympics were

"continuing as planned". The following day, a spokesperson for the International

 56

Olympic Committee (IOC) confirmed that the Games would proceed according to

schedule.] On 18 March, the IOC repeated its opposition to a delay or

cancellation.

On 23 March, Canada, Australia and Great Britain said they would

withdraw from the Games if they were not postponed by a year. On the same day,

Japanese Prime Minister Shinzo Abe stated he would support a proposed

postponement, citing that ensuring athlete safety was "paramount”. That same day,

veteran IOC member and former vice president Dick Pound told USA Today that

he expected the Games to be postponed.

On 24 March 2020, the IOC and TOCOG announced that the 2020

Summer Olympics and Paralympics would be rescheduled to a date "beyond 2020

but not later than summer 2021". They stated that the Games could "stand as a

beacon of hope to the world during these troubled times", and that the Olympic

flame could become "the light at the end of the tunnel in which the world finds

itself at present". Prime Minister Abe stated that IOC president Thomas Bach

responded "with 100% agreement" to his proposal to delay the Games. For

continuity and marketing purposes, the Games will still be branded as Tokyo 2020

despite the change in scheduling. Although several Olympics have been outright
 57

cancelled by world wars, including the 1940 Summer Olympics (which were

originally awarded to Tokyo, moved to Helsinki after the onset of the Second

Sino-Japanese War and ultimately called off amid the wider onset of World War

II), this marks the first Olympics to be postponed to a later date instead.

On 30 March 2020, the IOC and TOCOG announced they had reached an

agreement on the new dates for the 2020 Summer Olympics, which would begin

on 23 July 2021 with the Opening Ceremony, and with the Closing Ceremony to

take place on 8 August. The subsequent Winter Olympics in Beijing are scheduled

to begin the Opening Ceremony on 4 February 2022, less than six months later.

Shortly before the postponement was confirmed, the IOC and Tokyo 2020

organizers formed a task force named "Here We Go" with the remit to address any

issues arising from postponing the Games, such as sponsorship and

accommodation. The organizers have confirmed that all athletes who have already

qualified for Tokyo 2020 will keep their qualification slots.

According to an estimate conducted by professor emeritus Katsuhiro

Miyamoto of Kansai University and reported by the NHK, the cost of delaying the

2020 Olympics by one year will be 640.8 billion yen (US$5.8 billion), taking

maintenance expenditures for the unused facilities into account.

 58

On 28 April 2020, health experts expressed concern that the Tokyo

Summer Olympics in 2021 might be cancelled if the pandemic should persist. In

an interview with Japanese sports daily Nikkan Sports, Organizing Committee

president and former Japanese Prime Minister Yoshirō Mori asserted that the

Games would be "scrapped" if they could not go ahead in 2021. On 20 May 2020,

Thomas Bach expressed in an interview with NBC Sports that the job of

reorganizing the Tokyo Games was "a mammoth task" and also admitted that the

event would have to be cancelled altogether if it could not take place in the

summer of 2021. The complete cancellation would cost Japan ¥4.52 trillion

(US$41.5 billion), based on operating expenses and loss of tourism activity.

However, both Bach and Mori expressed optimism about the Games going ahead.

Indian Olympic Association president Narinder Batra and World Health

Organization director and general Tedros Adhanom also remained optimistic

about the event being able to take place in 2021.

On 21 January 2021, multiple sources reported that the Japanese

government "privately concluded" that the Games had to be cancelled. The

government denied the claims, stating that the reports were "categorically untrue".

The outbreak has affected professional sports in Japan. Nippon

 59

Professional Baseball's preseason games and the Haru Basho sumo tournament in

Osaka were announced to be held behind closed doors, while the J.League

football and Top League rugby suspended or postponed play entirely. On the

weekend of 29 February 2020, the Japan Racing Association closed its horse

racing meets to spectators and off-track betting until further notice, but continued

to offer wagering by phone and online.

The outbreak has affected school sport in Japan. Health concerns led to

sporting events such as baseball, basketball, and soccer in school being suspended

or postponed, due to unexpected postponement of education generally.

Two Yomiuri Giants players have tested positive for the new coronavirus, the

Central League team announced on 3 June 2020, casting a shadow over Nippon

Professional Baseball's plan to start the 2020 season on 19 June 2020.

Entertainment

On 26 February 2020, Abe suggested that major sporting, cultural and

other events should be cancelled, delayed or scaled down for about two weeks

amid the new coronavirus outbreak. As a result, Jpop groups Perfume and Exile

cancelled their concerts scheduled that night at Tokyo Dome and Kyocera Dome
 60

Osaka, respectively, both of which have a capacity of 55,000. On 27 February

2020, AnimeJapan 2020, originally scheduled to be held in Tokyo Big Sight in

late March, was cancelled.

A number of major amusement parks announced temporary closures. On

28 February 2020, Tokyo Disneyland, Tokyo DisneySea and Tokyo Disney Resort

were temporarily closed from 29 February 2020. Universal Studios Japan also

announced a closure the same day. By mid-March, some attractions began to

partially reopen, with Huis Ten Bosch and Legoland Japan Resort reopening with

limited services (outdoor attractions only, visitors subject to temperature checks

before entering) on 23 March 2020. However, the Disney parks and Universal

Studios Japan delayed their re-openings until mid-to-late April. Later on, at the

beginning of July 2020, Tokyo Disney Sea and Tokyo Disneyland reopened after

they reported their plan on 25 June 2020.

Affected by the shortage of outsourced staff due to the COVID-19 outbreak, many

Japanese animated films and TV shows announced changes or postponed

broadcasts due to production problems.

On 25 March 2020, it was announced that Japanese comedian Ken

Shimura had tested positive for COVID-19. Shimura died on 29 March 2020 at
 61

the age of 70.

Not only anime series but also drama series have been silently refrained

production to prevent the spread of infection, and most of telecasting stations are

transmitting works from past years.

Distance Learning

On 27 February 2020, Prime Minister Shinzo Abe requested that all

Japanese elementary, junior high, and high schools close until early April to help

contain the virus. This decision came days after the education board of Hokkaido

called for the temporary closure of its 1,600 public and private schools. Nursery

schools were excluded from the nationwide closure request. As of 5 March, 98.8

per cent of all municipally run elementary schools have complied with Abe's

request, resulting in 18,923 school closures.

Along with the school suspension, online education was being piloted in

some areas where the health crisis was not severe, but there was a concern that the

education gap was widening in each region due to the limited online environment

in Japan. Due to the sudden public health crisis, school closures are taking place

in the middle of school, and education gaps in each region and childcare problems
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in the home have led to difficulties in education. While there are promising plans

to postpone the start of the new semester to September, centered on local politics,

there are also opinions that some require a careful approach to changing the

semester system. Those who promote semester change into September are

pursuing a new semester change based on bridging regional gaps and meeting

world standards, and those who ponder semester change argue that the online

education environment needs to be rapidly updated by region before the semester

change.

Harassment

Due to prejudice and ignorance, social harassment is expanding

concerning infectious diseases. Because of their worries about being contracted,

the number of cases where medical personnel's family commuting is restricted, or

people around the infected person is disturbed has increased. In addition, there are

increasing cases where small business owners, who were inevitably operating, are

forced to take self-sufficiency by neighbors who feel anxious and deprived.

While telecommuting is being encouraged, videoconferencing is also

increasing the number of psychological pressures caused by authoritarian attitudes

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and sexual harassment. The negative effects of telecommuting also exacerbated

the problem of privacy infringement, leading to exposure of privacy in the

workplace and social pressure. Some companies have compulsory video

conference participation rules, with the public request of active reactions and

optimistic expressions.

As the number of telecommuting cases increased, the number of working

hours in the homes of workers increased, causing conflicts between women and

men. In some cases, the number of cases of domestic violence has also increased

by increasing discord among families.

Aid to China

On 26 January 2020, Japanese people donated a batch of face masks to

Wuhan. According to the Liberty Times of Taiwan, these were actually purchased

by China, but Japanese media and the Japanese Consulate General in Chongqing

stated that it was a donation.

On 3 February 2020, four organizations, the Japan Pharmaceutical NPO

Corporation, the Japan Hubei Federation, Huobi Global, and Incuba Alpha,
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donated materials to Hubei.

On 10 February 2020, the Liberal Democratic Party's Secretary-General

Toshihiro Nikai said that the party would deduct 5,000 yen from the March funds

from members of the party to support mainland China.

Restaurants

Between April and September 2020, restaurants accounted for 10% of all

bankruptcies. Ramen restaurants have been particularly affected, with 34 chains

filing for bankruptcy by September. Ramen restaurants are typically narrow and

seat customers closely, making social distancing difficult. COVID-19 cases

increases the consumers purchasing food online. In the meanwhile, consumer

practices have changed as a result of social distancing, e-shopping and infrequent

shopping have become common; takeaway and home delivery have become an

alternate to closed restaurants.

Suicides

The pandemic seems to be the reason for the abrupt end to the slowly declining

trend in suicides in Japan for the last 10 years. Since July 2020 their number

increased significantly to record highs. Women bear the major part of this
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increase.

Online Market

The Japan cross-border e-commerce market size was valued at USD 2.59

billion in 2019 and is expected to grow at a compound annual growth rate

(CAGR) of 7.5% from 2020 to 2030. Cross-border e-commerce is termed as

international online trade. It is also known as online trade between businesses and

consumers (B2C), two businesses (B2B), or two consumers (C2C). Cross-border

e-commerce occurs when a consumer chooses to buy a product from an online

seller located in another country. There are several reasons such as varied product

pricing and, differentiation, quality, shipping options, and payment methods that
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enable a consumer to buy a product through cross-border e-commerce. The

market in the country is anticipated to witness significant growth owing to several

factors such as the growth of the overall e-commerce industry, availability of

different payment methods, along with online fraud prevention measures.

Factors such as high urban population, internet penetration, changing

shopping behavior coupled with rising awareness about e-commerce among

consumers are anticipated to fuel the market growth over the forecast period. For

instance, the internet penetration rate in Japan in 2019 was 93.8%. According to

industry experts in Japan, consumer behavior in Japan is changing rapidly. There

is rising inclination amongst consumers towards buying globally recognized brand

products, and they are often increasingly shopping more online. These factors

have also paved the way for several payment providers and merchants to enter the

Japanese market. Furthermore, more than 60% of consumers in Japan pay for the

products using credit cards; also apparel & fashion is anticipated to be the leading

category in Japan.

Established organizations and large enterprises are leaning towards online

business due to lesser expenditure in communication, and infrastructure.

E-commerce offers the organization an easier reach for the customers and hence,
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necessary exposure to business is also achieved. E-commerce is also driven by the

increasing importance of online marketing tools such as Google ads and Facebook

ads. The marketing options these days are in abundance due to the popularity of

social media applications; this in turn helps in escalating the market towards

growth trajectories.

Furthermore, the ongoing COVID-19 pandemic spread has affected the

entire world. However, several countries are moving toward recovery. During the

crisis consumer buying behavior regarding cross-border differs by the stage of the

pandemic reached in each market. The initial months of January and February

were challenging however, the sales rate picked up again from March. The

pandemic has significantly affected the brick and mortar stores, however,

according to Rakuten Super Logistics., a freight brokerage and e-commerce order

fulfillment company based in Japan, retailers who have an online presence

witnessed a 52% increase in order during the pandemic.

In terms of revenue, Business to Consumer (B2C) dominated the Japan

cross-border e-commerce market with a revenue share of 53.85% in 2019. This

high share is attributable to the growing middle-class population and intense use

of social media is also aggravating the demand for online purchasing of various
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products and services, thereby positively impacting the Business to Consumer

(B2C) market growth. The internet has transformed the way people sell and buy

goods and services. E-commerce or online retail is changing the shopping

experience for customers.

Banks and other players in the market are allowing a safe and secure

online platform to pay easily via payment gateways. Market players are focusing

on unique changes to their business models in order to enable sellers and

consumers to transact online. The big retailers in the market are trying to

complement their traditional retailing with online commerce and tying up with

other big e-commerce players.

The Customer to Customer (C2C) segment accounted for over 10% of

the market in 2019, however, it is expected to record the highest growth from

2020 to 2030, expanding at a CAGR of more than 8%. Companies are offering

platforms where individual sellers from one country can sell products to different

countries. This enables individuals to directly contact the buyer and ship product,

thus, eliminating the need for middlemen. However, the lack of trust is anticipated

to inhibit the segment growth over the next few years.

The furniture and appliances segment held the largest market share of 25.33% in
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2019. This is attributable to the rising presence of companies offering home

furniture and appliances. Additionally, the current ongoing work-from-home

situation has also positively affected the segment growth. For instance, several

companies have advised their employees to work-from-home. Due to social

distancing, millions are turning towards the internet since social interactions are

moving online and business-to-business communications are taking place digitally.

According to e-commerce industry experts, this has positively impacted the

e-commerce industry and several e-commerce companies have witnessed a

tremendous increase in demand for products such as power banks, routers,

headsets, laptops, worktables, and chairs.

The electronics and media segment held a considerable market share in

2019 and is expected to continue retaining a high share for the next few years.

Mobile phones are a major factor contributing to the market share of the

electronics and media segments. Apple Inc.’s iPhones are hugely popular in Japan;

thus, people use e-commerce websites to buy these phones from sellers outside

the country. The personal care segment is anticipated to record a high CAGR from

2019 to 2021 owing to the increasing popularity of importing cosmetic products

In Japan, over 80% of the population is using the internet while 70% of adults in
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Japan shop online. Around 54% of the population in the country uses smartphones

and about 14% of online sales are made through mobile phones. The country has a

market of 76 million online shoppers where 10.2% of consumers shop from

overseas websites. Localization is considered a key element to success as the

population patronizes portals which are easy to comprehend and use the Japanese

language.

The market is consolidated and is marked by intense competitive rivalry as

there are few market players conducting their business operations. The market has

witnessed various inorganic growth strategies such as acquisitions and mergers,

partnerships, and collaboration adopted by companies over the recent past. For

instance, in December 2018, Rakuten, Inc. announced a collaboration with

Walmart, Inc., under which the first Walmart e-commerce store, Walmart Rakuten

Ichiba Store, was opened in Japan. This collaboration will enable Rakuten, Inc. to

gain a competitive edge in the market while Japanese customers will be able to

access a wide variety of U.S. branded products, including outdoor goods, fashion

apparel, and toys.

Market players are also focusing on expanding their business by launching

various partnership programs across different regions. In October 2019, Amazon,

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Inc. announced the launch of Project Zero in Japan. The initiative is aimed at

improving customers’ online shopping experience by identifying counterfeit or

fake products using the company’s self-service counterfeit removal tools and

eliminating such products and suspected entries. Project Zero has already been

implemented in the U.S. and Europe and has proved successful. Some of the

prominent players in the Japan cross-border e-commerce market include:

 Amazon.com, Inc.

 Rakuten, Inc.

 Kakaku.com, Inc.

 Yahoo! Japan Corporation

 Apple Inc.

 DMM.com, Ltd.

 YODOBASHI CAMERA CO., LTD

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Festivals and Contests

The following major festivals were cancelled:

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International travel restrictions

Restrictions on entry to Japan
On 3 April 2020, foreign travelers who had been in any of the following countries

and regions within the past 14 days were barred from entering Japan. This travel
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ban covers all foreign nationals, including those holding Permanent Resident

status. Foreign nationals with Special Permanent Resident status are not subject to

immigration control under Article 5 of the Immigration Control Act 1951 and are

therefore exempt.

Japanese citizens and holders of Special Permanent Resident status may return to

Japan from these countries but must undergo quarantine upon arrival until testing

negative for COVID-19.

Restrictions on entry from Japan

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Tax measure –Direct and Indirect

General Information

Fiscal stimulus spending by the government will serve as the main tool for

softening the outbreak’s economic impact. The government is significantly

expanding subsidies to maintain jobs impacted by the health crisis.

Filing/Payment Deadline Extension

The payment due dates for 2019 tax return for taxpayers who use automatic bank

transfer will be extended as follows:

• Individual income tax and special reconstruction income tax are due May 15,

2020.

• Individual consumption tax and local consumption tax are due May 19, 2020.

• The payment due date for consumption taxpayers who apply special measures

for certain short tax periods is also May 19, 2020.

The National Diet on 30 April 2020 passed legislation that includes tax and

economic measures in response to the coronavirus (COVID-19) pandemic, the

legislative measures include tax relief, such as:

A grace period of one year for tax payments of almost all national tax

liabilities of corporate or individual taxpayers with payment due dates between 1

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February 2020 and 31 January 2021, provided there has been a 20% decrease in

the taxpayer’s revenue for the same period in the prior year.

• Tax refund by application of tax loss carrybacks—expanded for companies

with stated capital of JPY 1 billion or less (from JPY 100 million or less).

• Tax reduction for capital investments with regard to teleworking for small and

medium-sized companies.

• Allowance of a charitable (donation) deduction by individuals who forfeited a

right to claim a refund of the amount they paid for admissions to a cultural,

arts or sporting event that was cancelled because of the pandemic.

• Flexible treatment of the requirements for application of the special deduction

available for housing loans.

• Special rules for consumption tax—when sales for a one-month (or longer)

period between 1 February 2020 and 31 January 2021 are decreased

significantly (50% reduction or more), the selection or cancellation of taxable

company status for consumption tax purposes is to be permitted.

• Stamp tax exemption for contracts involving public or private financial

institutions.

• There are also local tax relief measures (such as a grace period for tax
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collection and reduction of property tax on certain property owned by small

and medium-sized entities).

Additional Information

In April, 2020, the National Tax Agency released a set of “frequently

asked questions” (FAQs) concerning tax relief measures provided in response to

the coronavirus (COVID-19) pandemic, addressing the following:

• Procedures for the extension of tax return filing and tax payment due dates for

corporation tax, local corporation tax, and consumption tax in response to the

pandemic.

• Providing instructions concerning the treatment of reductions of directors’

compensation in response to business downturn.

• Procedures for individual taxpayers with regard to extensions of tax return

filing and tax payment due dates regarding individual income tax, gift tax, and

individual consumption tax.

On April 15, 2020, the NTA extended the AEOI reporting deadline and

amended the CRS legislation.

On April 20, 2020, the Tokyo Bureau of Taxation released information on the

procedures that companies should follow to extend the tax return filing and
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payment due dates for corporate business tax and inhabitant tax purposes.

Companies not able to file their tax returns or pay the related taxes by the due

date because of “unavoidable reasons” related to the COVID-19 pandemic may

avail themselves of one of two application methods for an extension for filing

returns and paying tax:

• File Form No. 22 regarding extension by disaster (under Tokyo metropolitan

ordinance 17-2)

• File Form No. 13 regarding extension by disaster (under local taxation law

72-25)

• A list of FAQs addresses the procedures for extension of return filing and tax

payment due dates for corporate business taxpayers and payers of corporate

inhabitant tax in Tokyo.

Business Income Tax

• On April 13, 2020, the NTA has amended the administrative guidance for

corporation tax to provide that certain actions in transactions between business

entities—such as forgiveness of trade receivables or the provision of

low-interest loans—when there are financial difficulties related to the

pandemic, should not be treated as donations or entertainment expenses.

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• In addition, for small and medium-sized enterprise (SMEs), a tax reduction (in

terms of special depreciation or tax credits) has been introduced for capital

investment in teleworking.

Customs/Import and Other Miscellaneous Taxes

On April 30, 2020, the National Diet passed additional tax relief

measures which, among others, provide for a reduction in the taxable basis for

property tax purposes of depreciable assets and houses for business owned by

SMEs to one half or zero for 2021.

Employment-related measures

Request for work style change

• The government asked people and companies for promotion of telework to

prevent the spread of infection

Expansion of employment adjustment subsides program

• MHLW（Ministry of Health, Labor and Welfare） decided to the expansion of

employment adjustment subsides program and ease its eligible criteria.

• Employment adjustment subsides program aims to support employers who are

suffered from the business downturn but maintain employment by paying

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leave allowance and letting employees take partly paid leave, rather than firing

them

• As a special measures effective from April 1 to December 31, MHLW

subsidize maximum 100% of leave allowance for SMEs and maximum 80%

leave allowance for large enterprises

• The subsidy is capped at JPY 15,000 a day per employee on the leave.

Economic stimulus measures

Monetary Policy:

• Doubling the target for net purchases of exchange-traded funds to JPY 12

trillion ($112 billion)

• Agreeing to coordinated foreign swap lines, to lower the cost of borrowing

dollars internationally, with the US Federal Reserve

• Establishing a new one-year facility that would offer loans against corporate

debt as collateral at a 0% interest rate

• Increasing the upper limit for its purchases of commercial paper and corporate

bonds by ¥2tn.

Key business support measures:

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Loan for large companies

• Ministry of Finance (MOF) decided to use loan for crisis response. Low

interest rate loan provided by Development Bank of Japan (DBJ). As of End

of October, total lending outstanding was ¥2,012.1 billion (190 cases).

According the Japanese media, most of the loan provided for automotive and

transportation industries.

Loan, loan guarantee and cash benefit for SMEs

• Ministry of Finance (MOF) decided to use safety net loan (loan limit:

JPY720million) and loan for crisis response (loan limit: JPY300million) to

support SMEs. Low interest rate loan provided by government financial

institutions (JFC, Shoko Chukin Bank etc.).

• Ministry of Finance (MOF) established special loan program for novel

coronavirus. Low interest rate loan provided by Japan Finance Corporation

(JFC) and Okinawa development Finance Corporation. Loan limit is

JPY300milion.

• Ministry of Economy, Trade and Industry (METI) decided to use safety net

guarantee program (guarantee limit: JPY280 million) and crisis related

guarantee (guarantee limit: JPY280 million) to support SMEs.

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• The government established private financial institution’s no-interest

unsecured loan provided by utilizing prefectural directed credit programs. The

loan limit is JPY30million.

• Ministry of Economy, Trade and Industry (METI) established subsidy

program for sustaining businesses. This program targets companies facing

severe conditions in particular and provides them with subsidies for a wide

variety of purposes that in general are considered effective in supporting them

in sustaining or reviving their businesses. Eligible companies can obtain JPY 2

million (Maximum).

Custom measures

Import / Export

• Priority is given to the import and export customs clearance of goods that need

to be cleared urgently, such as relief goods related to countermeasures against

coronavirus and goods for securing lifelines.

Duty relief

• If it can be confirmed that the goods being imported will be provided free of

charge, the duty and JCT imposed on the goods will be exempted. In making a
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declaration of import of relief goods, etc. pertaining to the said measures, a

declaration may be made in a simplified form in the procedures to be

followed.

• Export of relief goods can also be declared using a simple form.

Customs procedures

• In the event that the coronavirus causes difficulties in customs clearance

procedures, Japan Customs are providing a flexible response as follows:

 Declaration at a convenient customs office

 Handling of seal. (I.e. for items that require the importer/exporter's or

customs broker's seal, such seal is not required.)

 Handling of items for which the original must be submitted or presented in

writing (i.e. Documents may be extended or submitted electronically.)

 Telework of Customs Brokers

• If it is found to be difficult to submit a certificate of origin, the submission

will be postponed. Please note that this treatment requires the submission of a

certificate of origin of export country itself. Therefore, if importer is unable to

submit the Certificate of Origin of the export country, importer will not be

able to apply the preferential tariff rate, and importer will need to file an
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amended return if there is a shortfall in the amount of duty and other tax

Measures to ease the lockdown

Roadmap for resumption of economic and social activities (Tokyo)

• 25 May: Reopen of libraries and museums etc. Indoor event (Under 50

persons) authorized.

• 1 June: Reopen of schools, theaters and cinemas, gyms and department stores

etc. Indoor event (Under 100 persons) authorized.

• 19 June: Reopen of music club etc. Indoor event (Under 1,000 persons)

authorized.

• 10 July: Indoor event (Under 5,000 persons) authorized.

Other measures and sources

Measures to ease the lockdown

• For now, the Government of Japan restricts arrival airports for passenger

flights from China or Republic of Korea to Narita International Airport (NRT)

and Kansai International Airport (KIX) only. The Government of Japan

suspends passenger transportation departing from China or Republic of Korea.

These measures will be implemented until the end of May. The period can be
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renewed.

Recovery Plan Overviews

Recovery plan: Emergency Economic Measures to Cope with COVID-19

Budget: 234.2 trillion yen

Announcement: April 20(1st package), May 27(2nd package)

Main orientations: tourism, transportation, food service, entertainment business

etc.

Key measures

Basic concepts of economic measures

Two phases are set, considering time frame for strategic implementation of

various measures.

• The first phase, "Emergency Support Phase" is the period until the end of the

contagion in sight.

• The second phase, "V-shaped recovery phase", refers to the period aiming at

achieving strong recovery after the end of contagion by stimulating demands

and advancing social structural changes.

• The Government will take timely and decisive actions as needed, with closely
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monitoring the development of COVID-19 and its impact on the economies

and daily life.

Key measures of emergency support phase

• While containing the development of COVID-19, Government thoroughly

secures employments, business and daily lives, to maintain solid base for

economic recovery after the end of contagion.

• Measures to prevent the spread of infection, build medical treatment structures,

and develop and pharmaceuticals :

 Protecting employment and keeping business viable.

 Emergency support for Households: Cash payment to all residents in

Japan, Additional child allowance 10k per child, emergency microcredit

to troubled households, enhance rent support for low income households,

reduction or exemption of social security contribution etc.

 Emergency support for SMEs, etc.: Cash payment to SMEs and Sole

proprietors, No interest no collateral loan for SMEs, Reduction or

exemption of local property tax etc.

 Enhancement of the subsidy for leave allowance: From April to

December, Subsidy rates are raised for SMEs and Large enterprises.
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Key measures of V-shaped recovery phase

 The phase to achieve strong rcovery by stimulating consumptions in affected

sectors, as well as investments for future such as digitalization and

deployment of remote technologies.

• Recovery of economic activities through public and private cooperation as the

next phase

 Support affected sectors, such as tourism and transportation, food service

and entertainment business: Providing incentives to consumption

expenditure on related areas in form of price discount, voucher or point

reward etc.

 Revitalize regional economy: Supporting agriculture, forest and fisheries,

revitalizing inbound tourism through strategic promotion etc.

• Making economic structure more resilient

 Enhance resilience of supply chain.

 Facilitate overseas businesses, and strengthen export and domestic

production capacities of agriculture, forestry and fishery products and

food.

 Accelerate digital transformation by deploying remote technologies.

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 Frond-load public investment.

Effect covid-19 to the Japan e-commerce market

According to the report, Japan's e-Commerce Market is expected to reach

USD 325.9 billion by the end of the year 2026. This report captures a detailed

analysis of Japan e-Commerce Market and provides an all-encompassing analysis

of the key growth drivers and challenges.

The e-Commerce market in Japan is going through major

transformational change as the Japanese are shifting from brick-and-mortar stores

to online marketplaces. Online retailers are benefiting from urban density,

technically advance customers, developed economies, and a single language is

being used for all the purposes in Japan. Besides, Japan's distribution channel is

highly developed, and the small size of the country makes shipping and product

delivery much convenient, which is also boosting the ecommerce market in Japan.

Globally, Japan's ecommerce Market is ranked fourth after the United

States, China, and the United Kingdom. In the Asia Pacific region, it's ranked

second behind China. Japan's ecommerce Market is driven by high internet

penetration, which is secured by the Hi-tech network infrastructure. Besides,

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time-saving, an extensive range of product choices in one place, is another reason

for the growth of the ecommerce market in Japan.

COVID-19's Impact on Japan's e-Commerce Market

As the government of Japan has declared state of emergency due to

pandemic COVID-19, the ecommerce market in Japan is expected to remain

disrupted in the first half of 2020. The only supply of essential items is allowed in

the country. Japanese are spending mostly on grocery and personal care products;

even the median price of the liquid soap has risen in Japan, as citizens are

shopping in bulk. COVID-19 is having a catastrophic impact on many

non-essential products in Japan. People are avoiding shopping for non-essential

items like Apparel, Footwear, Bags & Accessories, but we expect the situation to

improve in the second half of 2020. Our research says that from 2021 onwards

situation will improve a lot, and growth will again come close to double-digit

CAGR.

Companies Performance in Japan's e-Commerce Industry

Companies like Amazon Japan, Yahoo Japan, and Rakuten are leading

e-Commerce platforms in Japan; these companies earn more than 50% of the

country's yearly revenue. Amazon is offering same-day delivery in approximately

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80% of Japan's population, covering nearly 100 Million consumers, which is

propelling the e-Commerce market in Japan. Segments like Fashion, Electronics,

and Media are the most significant purchases by Japanese customers. Travel and

Hotel bookings are also done through online methods. Besides, car insurance,

grocery purchases, online tickets, and entertainment sales are also gaining

popularity.