Development of casesDue to the accelerated spread of the virus, the Japanese government declared a countrywide state of emergency in April 2020. The government required all citizens to stay home whenever possible and facilities such as restaurants and theaters to temporarily suspend business. These strict measures remained until the end of May 2020. After the number of new infections per day set a record high on January 8, 2021 at over 7.8 thousand, the government announced the second state of emergency for Tokyo prefecture and four neighboring prefectures. Until March 2021, restaurants were requested to reduce working hours and operate until 8 PM. Due to the further growth of new cases and emerging infection cases of variants, the third state of emergency was announced in April 2021 for Tokyo, Kyoto, Osaka, and Hyogo. The state was later extended to six additional prefectures with a plan to lift mitigating measures on June 20. In the prefectures with restrictions, restaurants offering alcohol were obliged to shut down, while large shopping malls, restaurants without alcohol offering, theaters, and museums were bound to shorten opening hours.
The distribution of COVID-19 vaccination in Japan has begun on February 17, 2021, mainly for health professionals. On April 12, 2021, the government initiated the vaccine administration for the general population, starting from people aged 65 and older. As of the middle of June, close to three percent of the population were fully vaccinated.
Economic impactThe outbreak has not only caused severe ramifications for the health sector and hospitals, but it has also triggered an economic recession in Japan. The losses at the Nikkei Stock Average (Nikkei 225) for March 2020 alone were the worst since the Global Financial Crisis in 2008. In the second quarter of 2020, the real GDP growth rate recorded its sharpest fall in history after WWII of over 29 percent (annualized figure compared to the last quarter), representing the third consecutive quarter with negative growth. Although both stock markets and GDP growth have recovered to the pre-COVID-19 level by Q3 in 2020, the situation for businesses in the country is still alarming authorities. As of June 2021, an estimated total of around 24 thousand employees in the manufacturing industry and 14 thousand in the foodservice industry were dismissed due to the direct impact of business stagnation resulting from COVID-19. Close to 1.6 thousand bankruptcies were directly related to COVID-19 nationwide.
In March 2021, the Japanese government agreed with the International Olympic Committee (IOC) to go ahead with the Tokyo 2020 Summer Olympic and Paralympic Games in July 2021 without any audience from overseas. Therefore, the initially expected economic boost from inbound tourism will not materialize.