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Business

Stocks, euro rise on recovery hopes; U.S.-China rift lifts gold

NEW YORK (Reuters) – A gauge of global equity markets climbed on Thursday on optimism for a speedy economic recovery and a massive stimulus plan in Europe helped lift regional stocks and the euro, while gold rebounded on a safety bid on deteriorating U.S.-China relations.

MSCI’s gauge of stocks across the globe rose 0.46% but Wall Street ended lower after a late-session reversal on headlines that President Donald Trump would hold a news conference on Friday about China.

Markets are slowly realizing the escalating tensions between the U.S. and China is not going away and represent headwinds for the global economy, said Ed Moya, senior market analyst at OANDA in New York.

“There’s going to be some push back. No one was anticipating that in the immediate future,” Moya said. “It could derail some of the reopening momentum we’ve had.”

Oil futures rose, reversing earlier losses, on signs U.S. gasoline demand is increasing despite a big surprise build in crude inventories and worries that China’s new security law for Hong Kong could result in demand-dampening trade sanctions.

Gold pared earlier gains of 1% as rising stock markets dulled its safe-haven appeal, but the escalating U.S.-Chinese tensions kept bullion propped up.

China’s parliament approved national security legislation for Hong Kong that democracy activists say could erode the territory’s freedoms and jeopardize its role as a global financial hub.

Investors have largely turned a blind eye to renewed U.S.-China tensions and instead are focused on the reopening of business activity, Candice Bangsund, a global asset allocation portfolio manager at Fiera Capital in Montreal, said earlier in the session.

“Stocks have maintained that positive momentum largely reflecting optimism that growth will recover as COVID lockdowns are eased and economies progressively reopen,” Bangsund said. “Enhanced government stimulus announcements this week out of Europe and Japan have emboldened that risk-on trade.”

The number of Americans seeking jobless benefits fell for an eighth straight week last week, but claims remained astonishingly high.

In Europe, the pan-regional STOXX 600 index rose 1.64% to an 11-week high on the European Union’s plan to prop up the bloc’s coronavirus-hit economies with a 750-billion-euro ($828 billion) recovery fund.

The euro fell 0.04% to $1.1072, a two-month high. The dollar index fell 0.423%.

Stocks on Wall Street closed lower, as early gains in healthcare and technology stocks were overtaken by falling bank and consumer discretionary shares.

The Dow Jones Industrial Average fell 147.63 points, or 0.58%, to 25,400.64. The S&P 500 lost 6.4 points, or 0.21%, to 3,029.73 and the Nasdaq Composite dropped 43.37 points, or 0.46%, to 9,368.99.

Overnight in Asia, markets were subdued after U.S. Secretary of State Mike Pompeo warned Hong Kong no longer warranted special treatment under U.S. law.

MSCI’s broadest index of Asia-Pacific shares outside Japan ended flat. Shares in Hong Kong ended down 0.7% as Chinese shares managed to close in positive territory [.SS], while Japan’s Nikkei jumped 2.3%. [.N][.T]

Euro zone bond yields were stable, with Italian borrowing costs – a key European confidence indicator – edging toward eight-week lows. Safe-haven German bonds sold off slightly.

U.S. government debt yields rose as stocks gained, reducing demand for safe-haven bonds, before the Treasury is due to sell a record $38 billion of seven-year notes.

Benchmark 10-year notes rose 1.5 basis points to yield 0.6966%.

The U.S. Energy Information Administration said crude inventories rose 7.9 million barrels in the latest week, exceeding expectations, due to a big increase in imports. But gasoline stockpiles fell unexpectedly as refiners boosted output. [EIA/S]

U.S. crude futures rose 90 cents to settle at $33.71 a barrel while Brent rose 55 cents to settle at $35.29.

Saudi Arabia and some other OPEC oil producers are considering extending record-high output cuts until the end of 2020 but have yet to win support from Russia, according to OPEC+ and Russian industry sources.

U.S. gold futures settled up 0.1% at $1,728.30 an ounce.

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Business

World economic prospects darken, rebound delayed: Reuters poll

BENGALURU (Reuters) – Economic prospects for the developed world this year have darkened again in the past month as the coronavirus pandemic has rolled from Asia to the Americas, with a V-shaped sharp recovery expected by less than one-fifth of economists polled by Reuters.

With many countries starting to ease lockdown restrictions imposed to stop the spread of the virus, which has infected over 5.5 million people globally, equity markets are rallying on hopes for a swift return to health and prosperity.

But the trough in economic activity will be deeper and the rebound is likely to take longer than predicted just a short time ago, in part because the pandemic is spreading across the globe in stages and arriving in countries at different times.

Reuters polls of more than 250 economists taken over the past few weeks showed recessions in most major economies would be deeper this year than previously predicted.

“In many ways the outlook for the global economy resembles an obstacle course. In the first step, the economy falls into a big hole, starting in China in Q1, most of the rest of the world in Q2 and extending into Q3 in some emerging markets,” said Ethan Harris, head of global economics research at BofA.

“The second step is trying to reopen the economy without re-igniting the disease. The third step is dealing with the lagged impact of confidence on durable goods spending, the risks of a premature maxing out of fiscal and monetary stimulus, and a trade and tech war waiting in the wings.”

Almost three-quarters of economists, 69 of 94, who answered an additional question said the recovery would be either U-shaped, with a prolonged trough, or like a tick mark where the speed of the recovery is not as quick as the drop-off.

Only 15 respondents predicted a strong, V-shaped recovery. The others said it would be W-shaped, where a vigorous rebound results in another sharp slump, or L-shaped where the economy flatlines after the downturn.

Graphic – Reuters Poll: Expected shape of the global economic recovery – here

The world economy is now forecast to shrink 3.2% this year, compared to a 2.0% contraction predicted in the April 23 Reuters poll and -1.2% forecast in an April 3 poll.

No economist polled expected growth in 2020, with forecasts in a -0.3% to -6.7% range. The outlook under a worst-case scenario was -6.0%, with those in a -3.0% to -15.0% range.

Forecasts for global economic growth tended to range from 2.3% to 3.6% before the pandemic struck.

Graphic – Reuters Poll: Global economic outlook – here

But the global economy was expected to grow 5.4% next year, according to the latest poll, faster than the 4.5% predicted last month.

Forecasts for the U.S., the euro zone, Britain and Japan were lowered for this year from previous polls and expectations for 2021 growth were modest given the historic downturn as governments shut down their economies to varying degrees.

(For a graphic on the shape of things to come in the U.S.: here)

That was despite massive monetary policy easing by most central banks and unprecedented fiscal stimulus by many major countries.

(For a graphic on Global economic response to COVID-19: here)

A little more than half of economists, 38 of 69, said the global economic policy response to the pandemic – both fiscal and monetary – was “about right”. While 29 respondents said “not enough” only two economists said it was “too much.”

“There has been an unprecedented amount of policy easing so far. It may be that the current package of measures will prove insufficient, but if more needs to be done then policymakers can always do so,” said Peter Dixon at Commerzbank.

“Given that we are operating in unprecedented territory, it is difficult to judge how much support is required so we should give policymakers credit for what they have done so far.”

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Japan lifts Tokyo's state of emergency, eyes fresh stimulus

TOKYO (Reuters) – Japanese Prime Minister Shinzo Abe said on Monday that Japan will lift a state of emergency for Tokyo and four remaining areas later in the day but that it could be reimposed if the pace of infections picked up.

Social distancing curbs were loosened for most of the country on May 14 as new infections fell, but the government has kept Tokyo and four other prefectures under watch.

Abe also told a news conference that the total amount of stimulus from two economic packages would exceed 200 trillion

yen but it would still take considerable time to get back to normal life while controlling infection risks.

He added that Japan had managed to get the coronavirus infection under control in just one and a half months, in its own way, and that this showed the strength of the “Japan model.”

Japan’s economy minister told reporters earlier on Monday the government had received approval from key advisers to remove the state of emergency for all remaining regions.

“While the emergency state will be lifted, it is important to expand economic activity in stages as we establish a new way of living,” Yasutoshi Nishimura said. He added that the head of the advisory panel had recommended close monitoring of Tokyo, Kanagawa and Hokkaido prefectures, where cases had fluctuated.

The world’s third-largest economy has escaped an explosive outbreak with more than 16,600 infections and 839 deaths so far, according to NHK public broadcaster; however, the epidemic has tipped it into a recession and plunged Abe’s popularity to multi-year lows.

An Asahi newspaper poll conducted at the weekend showed Abe’s support rate at 29% – the lowest since he returned to power in late 2012 – and disapproval at 52%. The results mirrored a Mainichi newspaper survey published on Saturday.

A government task force was set to convene following Abe’s new conference, and the lifting state of emergency would take effect after that meeting.

Tokyo Governor Yuriko Koike has previously said the capital would move into “stage one” of loosening restrictions, once the state of emergency was removed. That would allow libraries and museums to reopen, and restaurants to stay open until later in the evening. Subsequent stages would see theatres, cinemas and fairgrounds reopen.

Tokyo reported 8 new infections on Monday, media said.

TWO-FIFTHS OF GDP

To support an economy on track for its deepest slump in postwar history, the government is considering fresh stimulus worth 100 trillion yen ($930 billion), mostly comprising financial aid for companies, the Nikkei newspaper reported on Monday.

The package, to be funded by a second supplementary budget, would follow a record 117 trillion yen spending plan deployed last month.

The combined stimulus would bring the total spending in response to the pandemic to about 40% of Japan’s gross domestic product.

The new package would include 60 trillion yen to expand loan programmes that state-affiliated and private financial institutions offer to firms hit by the virus, the Nikkei said. Another 27 trillion yen would be set aside for other aid including capital injections for ailing firms, the paper said.

The government is expected to approve the budget, which will also include subsidies to help companies pay rent and wages, at a cabinet meeting on Wednesday.

Japan’s economy slipped into recession in the last quarter, and analysts expect another 22% contraction in April-June.

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Hong Kong tensions rattle world stock markets, oil tumbles

NEW YORK/LONDON (Reuters) – Oil prices tumbled and global equity markets fell on Friday as China’s move to impose a new security law on Hong Kong further strained U.S.-China relations and clouded economic recovery prospects.

China also dropped its annual growth target for the first time, adding to uncertainty about the fallout from the COVID-19 pandemic, boosting safe-haven investments such as U.S. Treasuries US10YT=RR and the dollar.

China said it would impose new national security legislation on Hong Kong, leading President Donald Trump to warn that Washington would react “very strongly” against any attempt to gain more control over the former British colony.

Emerging market shares slid -2.72%. Stocks in Europe closed mostly flat and on Wall Street finished mixed as investors prepared for a long weekend in the United States, the UK and elsewhere.

After trading lower most of the session, Wall Street trended upward in late trading, with the S&P and the Dow managing to finish higher.

“The market just keeps battling higher, it just wants to go higher,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. “It’s anticipating improvement and we’ve seen all the bad news.”

Tensions between the world’s two largest economies have risen in recent weeks, with Washington ramping up criticism of China over the origins of the coronavirus pandemic, raising fears the rhetoric could crimp economic growth.

The U.S. Commerce Department said late in the session that it is adding 33 Chinese companies and other institutions to a blacklist for human rights violations and to address U.S. national security concerns.

The resurgent U.S.-China standoff weighed on oil prices.

“You have these doubts over China that is triggering this sell-off in oil, and it’s going to gain steam. If oil sells off, it’s hard to have a strong stock market,” said Ed Moya, senior market analyst at OANDA in New York.

Of major asset classes, crude oil has rebounded the most off the year’s lows on hopes world economies will soon recover from coronavirus-induced business shutdowns, he said, adding that he believed oil’s rally was overdone.

“There’s just too much uncertainty, and that’s going to likely keep on weighing on risk appetite,” Moya said.

MSCI’s all-country world stock index .MIWD00000PUS shed 0.40%, but the pan-European STOXX 600 index closed down just 0.3%.

On Wall Street, the Dow Jones Industrial Average .DJI fell 8.96 points, or 0.04%, to 24,465.16. The S&P 500 .SPX gained 6.94 points, or 0.24%, to 2,955.45, and the Nasdaq Composite .IXIC added 39.71 points, or 0.43%, to 9,324.59.

Earlier in Asia, Hong Kong’s Hang Seng index .HSI slid more than 5% to a seven-week low, its biggest daily percentage fall since 2015. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS lost 2.7%; Japan’s Nikkei .N225 fell 0.8%.

Analysts said extensive central bank stimulus continues to underpin sentiment and buoy equity markets.

Japan’s central bank unveiled a lending program to channel nearly $280 billion to small businesses hit by the coronavirus. India slashed rates for a second time this year and the European Central Bank, in the minutes from its last meeting, said it was ready to expand emergency bond purchases as early as June.

U.S. crude CLc1 fell 67 cents to settle at $33.25 a barrel, paring about half earlier losses of more than 5%. Brent LCOc1 settled at $35.13, down 93 cents on the day.

The dollar index =USD rose 0.331%, with the euro EUR= down 0.42% to $1.0903. The Japanese yen JPY= strengthened 0.01% versus the greenback at 107.62 per dollar.

Benchmark 10-year U.S. Treasury yields fell 0.2 basis points to 0.6574% US10YT=RR.

Spot gold XAU= added 0.5% and U.S. gold futures GCv1 settled up 0.8% at $1,735.50 an ounce.

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World News

Japan COVID-19 doctors lack fresh masks, hazard pay: union survey

TOKYO (Reuters) – Japanese hospital doctors on the front line of the COVID-19 pandemic face tough working conditions, with many reusing masks and few getting hazard pay, a survey by a labour union showed.

The survey of about 170 doctors, conducted online from late April through May 6, found three-quarters said they were ordered to work on the coronavirus front line, while four-fifths said they receive no hazard allowance for the work.

In the global scramble for protective gear and medical equipment, some Japanese doctors and other experts say there has been a failure by the national and some local governments to provide adequate financial assistance and protective gear to hospitals and medical staff.

The survey by the Zenkoku Ishi Union, posted on its website on Friday, found nearly 70% of doctors saying the government is failing to handle the situation properly.

An official at Japan’s health ministry said no one was available on Sunday to comment on the survey’s findings.

The survey found 31% of doctors reusing N95 respirator masks, which are essential for protecting healthcare workers from contagion and meant to be discarded immediately, with some using the masks indefinitely.

One doctor reported using “the same mask until the ear bands break.”

Prime Minister Shinzo Abe lifted his state of emergency for 39 of Japan’s 47 prefectures on Thursday, easing curbs on 54% of the population. The greater Tokyo area, accounting for one-third of the nation’s economy, and other major cities remain under restrictions.

Japan has reported some 16,300 cases of the coronavirus, not counting infections on a cruise ship that was quarantined in Yokohama port early this year, and 748 deaths from COVID-19, the disease caused by the virus, according to public broadcaster NHK.

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How lax rules, missed warnings led to Japan's second coronavirus cruise-ship hot spot

NAGASAKI, Japan (Reuters) – Seven days before Japan quarantined a cruise ship near Tokyo early this year, in what became one of the first coronavirus hot spots outside China, another cruise ship docked in southern Japan.

For the next five weeks, as the virus took hold in Japan and the Diamond Princess in Yokohama port grabbed global attention, the Japanese authorities issued no warnings to the Costa Atlantica 1,200 km (750 miles) to the southwest.

Passengers from the Yokohama ship were dying while people from the other vessel freely got on and off, dining and shopping in Nagasaki, and dozens of new crew members were flown in to replace those whose work contracts were expiring.

The Costa Atlantica now hosts one of Japan’s biggest clusters of the coronavirus, which infected one-fourth of the more than 600 people then on board.

Public-health experts say a lack of additional measures on cruise ships after the Diamond Princess outbreak, toothless coronavirus legislation and a nationwide paucity of virus testing combined to allow the outbreak on the Costa Atlantica to blossom.

This was compounded by local and national authorities’ decision to corral infected and uninfected people on the Costa Atlantica, making it harder to stem the on-board infection.

“It seems that a situation similar to the Diamond Princess is being created,” said Dr Amesh Adalja, an infectious-disease specialist at the Johns Hopkins Center for Health Security. “In an effort to keep cases from disembarking, more cases will occur among the (people on board), some of which could be severe and preventable.”

The law authorising Prime Minister Shinzo Abe’s national state of emergency and restrictions on movement by various regional governors carries few legal penalties, part of Japan’s postwar aversion to curbs on personal liberties. It relies instead on social pressure and respect for authority.

The lack of widespread testing or infection-tracing apps in Japan complicates the response in Nagasaki. Health officials say they are struggling to trace infection routes and do not know how the virus spread to the ship.

Abe’s government defends its cautious testing policies, saying it wants to avoid swamping hospitals with people who have only light cases. And while the virus has spread steadily, infections did not spike in Japan, as in some countries, and new cases have slowed since mid-April. Japan had confirmed about 15,000 coronavirus infections as of Tuesday, and 543 people are known to have died from COVID-19.

The Diamond Princess, which had more than 3,700 people on board, initially kept them all on the ship, contributing to the spread of infections to more than 700 and the deaths of 14.

The 86,000-tonne Italian-flagged Costa Atlantica carried no passengers when it docked for maintenance in Nagasaki. Of the initial 623 crew on the ship, 149 tested positive and five of those have been hospitalised.

That makes it one of Japan’s biggest clusters, according to Reuters calculations based on Oxford University data.

The Costa Atlantica and the Diamond Princess are both ultimately operated by Florida-based Carnival Corp.

“Sick crew members should be fully treated at local hospitals, but healthy crew should be returned to their home countries as soon as possible,” said Takanori Hamasaki, head of a local residents’ association.

“I think those who tested negative can turn positive while they are staying on the ship,” Hamasaki told Reuters in late April. “Honestly, their cabins on the ship are small – no one can stay healthy in that situation.”

About two weeks after the first case was detected, operator Costa Cruises S.p.A. began flying healthy crew members home. By Tuesday, 181 mostly Indonesians and Filipinos crew had been repatriated, the local government said. There has been no decision whether to repatriate people who test positive, said Katsumi Nakata, a senior official with Nagasaki prefecture.

Costa Cruises said in a statement, “The health and safety of our people, along with compliance and environmental protection, is always our utmost priority.”

The Mitsubishi Heavy Industries Ltd unit that operates the Koyagi shipyard where the Costa Atlantica is docked, apologised to local residents late last month for “causing concern” and “misunderstanding” over the outbreak and said it would “fully cooperate” with the authorities.

Kunio Shiiba, a senior executive at Mitsubishi Heavy, bowing deeply at a news conference, also apologised for insufficient explanation about the crew members’ movement.

Costa Cruises manages health checks of the crew and their movement on and off the ship, while Mitsubishi controls the shipyard entrance and checks the temperature of those coming in, Shiiba said.

Hamasaki of the residents’ association said that while Mitsubishi apologised to them and explained the steps it had taken, the company offered no specific steps to avoid further infection.

“What we can do is wash our hands and wear masks,” he said. “This is going to be a long battle. If it drags on, it will be a problem for all of Japan, not just in Nagasaki.”

DEATH IN YOKOHAMA, RAMEN IN NAGASAKI

The Costa Atlantica, diverted from virus-ravaged China, docked in Nagasaki on Jan. 29, five days before the Diamond Princess moored in Yokohama, where infection spread rapidly and the ship was locked down.

On March 6, a month before Abe declared the state of emergency, the Nagasaki government asked people to stay home, but local businesses remained open, attracting customers like Sara Zhou, a Costa Atlantica guest-services employee who sampled tomato ramen and Starbucks coffee in downtown Nagasaki.

“Delicious Japanese noodle, that for sure u will finish the last drop of tomato soup. U will love it go and try it,” Zhou wrote on Facebook, the day the seventh person from the Diamond Princess died. She did not respond to Reuters requests for comment.

Eight days later, after the first coronavirus case was reported in Nagasaki, Mitsubishi and the Costa Atlantica operator asked the crew to stay on board.

That request also went unheeded. More than 30 people left and boarded the vessel from April 1 to 20, when the ship’s first case was detected and the movement stopped, said local government official Futoshi Iwasaki.

A health ministry official handling the Costa Atlantica told Reuters the ministry “wasn’t in a position to give orders and we don’t have the power to enforce them.”

Now in their cabins, the crew while away the time chatting with each other from their balconies and hand-washing their laundry.

Healthy workers spray disinfectant around the ship. Pictures shared with Reuters show one wearing a helmet, goggles and mask with a plastic bag over his torso as he distributes meals to colleagues.

“People are thanking me for working as a frontliner. And I am happy to hand over sugar and salt they need,” the Filipino crew member told Reuters on condition of anonymity. “It is my best nightmare.”

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Economy

Benchmark JGB yields hit 2-week low as oil rout boosts safe havens

TOKYO, April 22 (Reuters) – Yields on benchmark 10-year Japanese government bonds fell to a two-week low on Wednesday, as a historic crash in oil futures ignited an exodus of investors from riskier assets into the safety of holding government debt.

U.S. crude futures have managed to trade in the positive territory after turning negative for the first time in history on Monday, leaving many investors stunned.

Oil supplies are so excessive that countries are running out of room to store barrels of crude, and energy demand is expected to remain low due to the coronavirus pandemic.

Worries that price disruptions will spread from the oil market is pushing money into safe havens like government debt.

The 10-year JGB yield fell 2.5 basis points to minus 0.010%, the lowest since April 6.

Futures contracts for 10-year JGBs rose 0.3 point to 152.4, with a trading volume of 6,394 lots.

The 20-year JGB yield fell 2.5 basis points to 0.315%.

The 30-year JGB yield fell 3.5 basis points to 0.435%.

In the middle of the yield curve, the five-year yield fell 2.5 basis points to minus 0.125%.

At the short end, the two-year JGB yield fell 1 basis point to minus 0.145%. (Reporting by the Tokyo markets team; Editing by Rashmi Aich)

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Japan scientist 'very pessimistic' Olympics will happen next year

Japan and the International Olympic Committee made the unprecedented decision last month to delay the Games for a year.

A Japanese professor of infectious disease has said he is “very pessimistic” the postponed Tokyo Olympics can open in 15 months.

“To be honest with you, I don’t think the Olympics is likely to be held next year,” said professor Kentaro Iwata on Monday. “Holding the Olympics needs two conditions: one, controlling COVID-19 in Japan, and controlling COVID-19 everywhere.”

More:

  • Coronavirus emergency kit: Social distancing to flatten the curve

  • What sporting events are affected by the coronavirus pandemic?

  • Euro2020: Kick-off delayed until next year

The Tokyo Olympics next July will be a “uniquely risky” event, demanding flexibility from organisers amid the uncertainty of the coronavirus pandemic, particularly if a vaccine has not been rolled out by then, medical experts say.

Japan and the International Olympic Committee made the unprecedented decision last month to delay the Games by a year, as the world battles the virus that has infected 2.3 million people and killed more than 150,000 globally.

But questions persist whether the Games can go ahead 15 months from now, as a vaccine could still be at least a year away, according to the most optimistic estimates.

“When we talk about bringing sports back, with packed stadiums, I really think that is something we are going to have to wait for a vaccine to be able to do,” said Zach Binney, an epidemiologist at Emory University in the United States.

Tokyo 2020 is set to run from July 23 to August 8, 2021, but organisers expect few changes to the original plan, including attendance by enthusiastic supporters.

But that might be overly optimistic, said Binney, a specialist in aspects of athlete health.

“Every person that you add to a gathering adds risk,” said Binney, who expects vaccine development would take one year to 18 months from the start of the outbreak, or until late 2021, at the earliest.

“So once you get up to 50,000, 70,000, 100,000 [fans] … that is an enormous amount of risk to be taking on without a vaccine.”

The Olympics was “a uniquely risky event”, he added, because of the threat represented by visitors streaming in from areas with a lot of infections, and the reverse flow when they return afterwards, perhaps carrying home infections.

Japan was spared during the initial stage of the coronavirus outbreak. But cases are now spiking, particularly in Tokyo and other large cities. As of Monday, there were about 12,000 detected infections in Japan and about 250 deaths.

The Olympics draw 11,000 athletes, while the Paralympic Games have about 4,400 competitors. Athletes are to stay in a sprawling housing complex on Tokyo Bay. The Olympics draw thousands of foreign visitors, relying on air travel to get them there and hundreds of hotels to house them.

Japan is spending $12.6bn to organise the Olympics although a government audit put the figure at twice that. Local estimates say the postponement will cost between $2bn and $6bn.

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Japan rushes to house ‘internet cafe refugees’

Japanese authorities are rushing to house thousands of homeless people following the closure of internet cafes in several major cities.

The cafes have become a common destination for those without secure housing.

They’re often open around the clock and many feature private booths, showers and entertainment, including games.

But the businesses have been ordered to close their doors to help contain the spread of coronavirus.

While Japan officially has a low homeless rate compared with many other developed nations, more than 4,000 “internet cafe refugees” reside in the capital, Tokyo.

City officials say they have begun providing them with hotel rooms and other forms of temporary accommodation. In neighbouring Saitama, authorities have also repurposed a sports hall for 200 people.

Tokyo’s government says welfare offices can send homeless residents to designated temporary accommodation, according to the Nikkei Asian Review.

But Kazuhiro Gokan, a consultant with a local homeless support group, told the newspaper that many people had been turned away because of “a misunderstanding among administrators”.

Japan has a relatively small number of infections compared with other countries – 6,748 confirmed cases and 108 virus-related deaths as of Sunday. But there are concerns a recent surge in cases in Tokyo could lead to a major outbreak.

Prime Minister Shinzo Abe has declared a month-long state of emergency, covering Tokyo, Osaka and five other prefectures. The governors of these prefectures now have the power to close schools and businesses, but no legal authority to order citizens to stay at home.

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Economy

Japan to form panel to mull big stimulus package: Source

TOKYO (REUTERS) – Japanese Prime Minister Shinzo Abe will form a panel of key economic ministers and Bank of Japan Governor Haruhiko Kuroda to discuss measures to prop up an economy hit by the fallout from the coronavirus epidemic, a government official with direct knowledge of the matter said.

The move puts Japan in line with nations across the globe preparing more costly measures to combat the global fallout of the coronavirus that has sent economies spinning toward recession.

The panel, to be held almost daily from Thursday through the end of this month, will summon economists and corporate executives to hear their views on steps to mitigate the hit from the coronavirus outbreak, the government official told Reuters on Wednesday (March 18), confirming an earlier report by the Nikkei economic daily.

Discussions by the panel will lay the groundwork for an economic stimulus package the government plans to launch in April, which Abe had said would include “bold and unprecedented” measures.

Ruling party lawmakers are calling for tax cuts and a spending package of up to 30 trillion yen (S$398 billion), a proposal Abe had said he will take into account.

The Mainichi newspaper separately reported on Wednesday that the package could also include cash payouts to households.

The epidemic has hit Japan’s economy, already reeling from last year’s sales tax hike and soft global demand, heightening the chance of a recession and stoking speculation the Tokyo Olympic Games may be cancelled or postponed.

The BOJ eased monetary policy through an increase in risky asset purchases in an emergency meeting on Monday.

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