Japan’s Abe leans toward blanket cash payouts to fight coronavirus downturn

FILE PHOTO: Japan’s Prime Minister Shinzo Abe adjusts his face mask as he arrives to speak to the media on Japan’s response to the coronavirus disease (COVID-19) outbreak, at his official residence in Tokyo, Japan, April 6, 2020. REUTERS/Issei Kato/File Photo

TOKYO (Reuters) – Japanese Prime Minister Shinzo Abe will likely instruct cabinet to make changes to a draft supplementary budget to offer blanket cash payouts of 100,000 yen ($926) each to all citizens, Kyodo news agency reported on Thursday, as the coronavirus pandemic inflicts deeper pain on the world’s third-largest economy.

Under the current supplementary budget plan, the government sets aside money to fund cash payouts of 300,000 yen but only for households whose income is judged to have been hit by the coronavirus.

The change would be a nod to growing calls from ruling and opposition lawmakers for Abe to take bolder steps to soften the economic blow of the coronavirus, such as by handing out more cash to more people.

Rising coronavirus cases and business closures are piling pressure Japan’s economy which is on the cusp of recession.

The government has declared an emergency in Tokyo and six other areas including Osaka, with more than 9,000 infections nationally and nearly 200 deaths.

The draft supplementary budget, compiled to fund a near $1 trillion stimulus package Abe’s administration unveiled last week, needs parliament approval to take effect.

It is rare for the government to make changes to a draft budget, which is carefully mapped out by the finance ministry taking into account the various views of politicians.

Any such modification would underscore the challenge Abe faces in dealing with the deepening economic toll from the pandemic, without adding too much strain to Japan’s already tattered finances.

Reporting by Leika Kihara; Editing by Michael Perry

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