Japan to tap on emergency reserve

JAPAN’S government is ready to tap a coronavirus emergency reserve on Friday to strengthen domestic manufacturing and subsidise employment, a government official told Reuters on Thursday.

The cabinet is likely to allocate about 90 billion yen (RM21.6 bil) in extra spending for a 220-billion-yen subsidy programme to bring production back to Japan from overseas, according to the official.

“It’s because there were many applications. There won’t be an expansion of the policy itself,” the official told Reuters on condition of anonymity because he was not authorised to speak to the media.

Through the programme, the government subsidises manufacturers to bring production back and reduce the risks of making goods such as electronics parts or medical equipment only in a select number of countries.

The trade ministry said in August it had received 1,670 applications worth about 1.764 trillion yen – about 11 times the remaining amount in the budget for the programme – for a second round of the programme, after ending a first, smaller round in June. It will announce which companies were successful in the second round this month.

The government will also allocate funds from the emergency reserve to extend an employment subsidy rolled out in response to the coronavirus pandemic, the official said. The government had decided in August to extend the subsidy from end-September to year-end.

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