KYODO NEWS - Mar 18, 2020 - 21:32 | All, Coronavirus, Japan

The Japanese government and the ruling coalition are considering providing cash to households in an effort to buoy personal spending dented by the coronavirus outbreak, sources close to the matter said Wednesday.

Officials and lawmakers are studying the possibility of extending more than 12,000 yen ($112) per person, a level the government provided to all Japanese people in 2009 in response to the global financial crisis following the collapse of Lehman Brothers Holdings Inc., according to the sources.

The envisaged cash handouts may serve as a pillar in an emergency economic package the government and the coalition are expected to put together as early as sometime in April.

The government and the coalition, which comprises the Liberal Democratic Party and its junior partner Komeito, will work out details such as whether the government will give cash to all citizens or limit the recipients to child-rearing and low-income households.

Other than the cash handout plan, extending the time limit and the content of a government reward points program for cashless payments and handing out gift certificates are among the possible options to help consumers spend more, the sources said.

The points program was launched in an attempt to offset the impact of the consumption tax hike to 10 percent from 8 percent on October 1 and is set to end in June.

Some members of the ruling and opposition parties have proposed an income tax cut, but the government is reluctant as it would not be advantageous to those whose income is too low to pay tax, according to the sources.

They will make a decision after taking into account the views of experts in a meeting starting Thursday, the sources said.

The outbreak of the pneumonia-causing virus has forced many people in Japan to refrain from going out and has caused a sharp drop in the number of inbound tourists, which is dampening domestic consumption and also causing pain to the tourism sector.

The government set aside about 2 trillion yen for the 2009 cash handouts, in which people aged 65 or older, and 18 or younger, received 20,000 yen, 8,000 yen more than the standard handout.

Related coverage:

Japan to ask 14-day self-quarantine for travelers from Europe

Infected man in Japan who wanted to "spread virus" dies

Osaka to offer free school lunches as coronavirus hits local economy