With coronavirus cases hitting record-highs in Tokyo and rising in other urban areas, the government announced on Monday that it plans to give local governments greater power to request business closures. That could include penalties for firms that ignore requests to close. The plan to revise the special coronavirus law appears primarily aimed at giving local authorities the ability to impose restrictions without the need to declare a state of emergency again. It shows that the government is readying itself for the possibility of targeted, localised lockdowns if cases continue to surge. The recovery in consumer spending has been disappointing so far in Q3 – for example, there were still very few people venturing to the cinema in early-July. And the prospect of many businesses in Tokyo, and potentially those in other major cities such as Osaka, having once again to close presents downside risks to our forecast of a 4.5% q/q rebound in consumption in Q3 following a 8% q/q drop in Q2.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services