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Japan CEOs accept state of emergency, but brace for tough losses, Nikkei survey

  • January 16, 2021
  • , Nikkei Asia , 6:24 a.m.
  • English Press

By Nikkei staff writers

 

TOKYO — Two-thirds of chiefs at major Japanese companies expect revenue to fall during the country’s widening coronavirus state of emergency as economic activity slows in the biggest cities, a Nikkei survey shows.

 

A major year-on-year decline in sales during the emergency period is anticipated by 21% of respondents, after Japan’s recent declaration covering Tokyo and other regions. Another 45% predict a smaller drop in revenue.

 

While vowing to increase the use of telecommuting, business leaders called on Prime Minister Yoshihide Suga’s government to do more to fight the spread of the virus.

 

Takeshi Niinami, CEO of beverage group Suntory Holdings, urged the government “to put forward a timetable for vaccinations soon” and make free coronavirus tests available to detect infected people who show no symptoms.

 

Presidents, chairmen and CEOs from 133 companies responded to the poll, conducted Jan. 8-14.

 

No business leaders opposed the state of emergency. Instead, they were split roughly 50-50 on whether it was appropriate now or should have been declared sooner.

 

Sumitomo Chemical President Keiichi Iwata described the government’s decision as “based on the spread of the virus, expert opinions and the views of the medical field, governors and others.” But Toshihiro Uchiyama, president of bearing maker NSK, said the government was slow to act “given that it could have predicted the explosive spread of infections.”

 

More than 20% of respondents expressed concern for the survival of their business if the emergency declaration is not lifted within three months. The state of emergency is now set to last until Feb. 7.

 

But 48.5% voiced no such concern regardless of how long the decree stays in place. This represents a sharp improvement from 27.3% in a survey during Japan’s previous state of emergency, which began last April.

 

Many companies are better prepared this time around.

 

“We have enough liquidity on hand. If the declaration is extended, we will look to adjust our services in line with decreased demand,” said Takashi Goto, president of rail and hotel group Seibu Holdings.

 

The survey shows a rapid switch to telecommuting, with 84.1% of businesses having at least seven in 10 employees work from home — nearly triple the share from a December poll — and 7.9% going all remote.

 

“Hitachi has continued working from home as much as possible since the last state of emergency was lifted, and we will redouble our efforts in response to the latest declaration,” President Toshiaki Higashihara said.

 

Nearly all respondents said they are reducing face-to-face meetings and restricting business dinners and travel. More than 20% are conducting coronavirus tests for employees.

 

Aid for medical institutions and the development of treatments and vaccines topped the list of areas that respondents said need more government effort, regardless of whether an emergency decree is in place.

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