Work stoppages and no chatting at lunch: Japan Inc grapples with COVID
05/08/2022 06:35
By Rocky Swift and Satoshi Sugiyama
TOKYO, Aug 5 (Reuters) - Japanese companies are temporarily
shutting offices or suspending production as they battle a
record wave of COVID-19, disrupting businesses in a country that
has until now weathered the pandemic better than most advanced
economies.
Automakers Toyota Motor Corp 7203.T and Daihatsu Motor Co
last week halted production line shifts because of employee
infections. KFC Holdings Japan Ltd 9873.T has had to shut some
fast-food restaurants and move staff to fill gaps, while Japan
Post Holdings Co 6178.T has temporarily shut more than 200
mailing centres.
Japan's tally of COVID cases has surged past those of other
countries as the full impact of the BA.4 and BA.5 variants
dominating around the world hits home. Japan had more than 1.4
million new COVID cases over the past week, World Health
Organization data showed.
Companies are scrambling to cope.
"We have divided the meal time into several time slots and
have told workers to sit in one direction and not to talk at
all," Subaru Corp 7270.T CFO Katsuyuki Mizuma told reporters
recently, describing how the automaker was trying to fend off
infections and work stoppages.
Newly diagnosed COVID cases reached an all-time high for
Japan of almost 250,000 on Wednesday. Hospitalisations and
deaths are on the rise too but not as drastically as in previous
waves because of the prevalence of vaccinations and booster
shots.
Japan has had an enviable record in its response to COVID,
avoiding the disruptive lockdowns and big death tolls that have
accompanied the pandemic elsewhere.
The country of 125.8 million people has had more than 32,000
deaths, a fraction of the tolls in the United States and
Britain, for example.
The latest outbreak will likely show whether it can maintain
its flexible response aimed at "living with corona" and limiting
the economic impact, particularly if the disruption now being
felt gets worse of lasts for an extended period.
"There is still a shortage of semiconductors and the spread
of the coronavirus is currently increasing," a Toyota
spokesperson said last week.
"The future remains unpredictable."
Health authorities advise that those who test positive
should quarantine for 10 days and their close contacts should
isolate for at least five.
Toshihiro Nagahama, chief economist at the Dai-ichi Life
Group, said production and retail would feel some pain as
infected people and their close contacts stay at home.
"As infections and close contacts increase, that will
certainly weigh on people's confidence to go out for meals,
shopping and the like," he said.
SUPPLY CHAINS
The disruption has particularly important implications for a
job market at its tightest in decades, especially for the small
and medium-sized enterprises that make up the majority of
Japan's companies. urn:newsml:reuters.com:*:nL4N2ZE0EE
Yoshiaki Katsuda an occupational health expert at the Kansai
University of Social Welfare, said big companies can hire
temporary workers to replace those who have to take time off but
they are still vulnerable to supply chain headaches.
"If smaller companies that supply products ... have to shut
down for a long period, then the production of bigger companies
could be affected," he said.
The wave of infections is snarling transport too.
Railway operator Kyushu Railway Co 9142.T suspended 120
train services in southern Japan last week when 53 crew members
tested positive or where close contacts of cases. Mitsui O.S.K.
Lines Ltd 9104.T cancelled four ferry crossings in western
Japan, and bus operator OdakyuBus Co Ltd slashed dozens of
routes around Tokyo.
The central government has devolved authority on infection
controls to prefectural governments, letting them step up
precautions as they see fit. Twelve prefectures have enacted the
measures with a focus on curbing risks to the elderly.
Support for Prime Minister Fumio Kishida has sagged in
recent polls as COVID surged, but a strong showing for the
ruling Liberal Democratic Party in elections last month has
given him some breathing room, said Tetsuya Inoue, a senior
researcher at Nomura Research Institute.
"For the moment, Mr Kishida and his administration are
prioritising the maintenance of economic activities rather than
to return to very strict measures against COVID," Inoue said.
Inoue said that whatever the drag on the domestic economy
that the wave of infections is causing, the bigger problem for
Japan was lockdowns in China and the knock-on effects that they
have on supply chains.
Relief for Japan's companies and the wider economy could be
in sight. Health experts project this wave of infection to peak
early this month.
"Given current trends, it is unlikely that infections will
continue to expand over the long term, and there is little need
to impose strict behavioural restrictions," doctors at the Tokyo
Foundation for Policy Research wrote in a recent paper.
(Reporting by Rocky Swift, Satoshi Sugiyama, Mariko Yamazaki
and Nobuhiro Kubo; Editing by David Dolan and Robert Birsel)
((rocky.swift@thomsonreuters.com;))