Japan to declare nationwide state of emergency amid virus spread

Abe has also instructed the ruling party to consider reworking a state budget to deliver 100,000 yen ($930) in cash to all citizens to help them weather the fallout from the pandemic, a government source said, Kyodo reports.

Abe acquiesced to Komeito, the coalition partner of the Liberal Democratic Party, which broached the idea of a blanket cash distribution plan and called for a rare review of an extra budget for fiscal 2020 that is already set to be submitted to parliament.

Currently, Tokyo, Osaka and five other prefectures are under a state of emergency.

The declaration, based on a revised law enacted last month, has given the governors of the seven prefectures the power to call for school and some business closures until this year's Golden Week holidays end on May 6.

Economists are saying Japan has entered a recession as stay-at-home requests by local authorities and business suspensions are dealing a blow to its economy already hurt by the 2 percent consumption tax hike in October last year.

The government stance has been to seek parliamentary approval next week for the extra budget -- a requisite for launching a scheme to give 300,000 yen to households whose income is deemed to have fallen sharply due to the virus outbreak.

Earlier Thursday, Komeito leader Natsuo Yamaguchi urged Abe in a phone conversation to revise the budget being compiled to enable the distribution of 100,000 yen to all citizens, a day after he pushed the prime minister to consider the new cash handout plan.

Abe instructed Fumio Kishida, the LDP's policy chief, to consider revising the extra budget for fiscal 2020, the government source said.

Besides Kishida, Abe met with LDP Secretary General Toshihiro Nikai and Finance Minister Taro Aso at the prime minister's office, apparently to discuss the proposed scheme.

Nikai is also a supporter of a 100,000 yen cash handout, but believes it should be contingent on the recipients' income levels.

Chief Cabinet Secretary Yoshihide Suga stuck to the government's position that the first priority is to have the current extra budget proposal approved by the Diet.

The global coronavirus pandemic has raised calls for economic stimulus, but Japan is cautious about taking on new debt to finance bold spending measures as its fiscal health is the worst among all developed nations with its debt twice the size of the economy.

At 108 trillion yen, the Abe government compiled Japan's largest-ever economic package to mitigate the negative impact of the viral outbreak.

Japan now has over 9,000 coronavirus infections confirmed including about 700 from the Diamond Princess, a cruise ship operated by a U.S. company that was quarantined near Tokyo in the early stages of the epidemic in Japan.