Japan PM Abe orders government to take steps to mitigate virus impact on economy

FILEPHOTO: Japanese Prime Minister Shinzo Abe gives a policy speech at the start of the regular session of parliament in Tokyo, Japan, January 20, 2020. REUTERS/Kim Kyung-Hoon

TOKYO (Reuters) - Japanese Prime Minister Shinzo Abe has ordered his government to take “all necessary steps” to mitigate the impact of the virus outbreak on the economy, including tapping state budget reserves, Economy Minister Yasutoshi Nishimura said on Friday.

The government will compile emergency measures to respond to the impact of the outbreak as early as next week, Abe was quoted as saying by Japan’s Jiji news agency.

“There’s a risk the coronavirus outbreak could hurt consumption, so we need to watch developments carefully,” Nishimura told reporters after a regular cabinet meeting.

“The impact on inbound tourism is also a concern,” he said.

Japan is set to host the 2020 Summer Olympics over July and August. The CEO of the Tokyo Organising Committee has said the outbreak could "throw cold water" on the growing momentum of the Games here.

Finance Minister Taro Aso told reporters he has asked government-affiliated financial institutions to ensure companies in need of funds to cope with the outbreak are able to borrow smoothly.

“To prevent the spread of new coronavirus from severely affecting business lending, we’ve decided today to ask for support from public and private financial institutions,” said Aso, who also oversees Japan’s banking sector.

Another 41 people on a cruise liner off Japan tested positive for coronavirus on Friday, bringing the total confirmed from the ship to 61.

Reporting by Yoshifumi Takemoto and Tetsushi Kajimoto; Writing by Leika Kihara; Editing by Himani Sarkar