Analysts in Japan forecast that the country's economy will shrink by up to 0.9 percent yearly if a state of emergency is declared for Tokyo and surrounding prefectures.
Nomura Securities, Nomura Research Institute, and Daiwa Institute of Research all say there's a strong possibility the economy will shrink during the first three months of this year.
Prime Minister Yoshihide Suga told a press conference a day prior that the government was considering the introduction of a state of emergency on the back of record-breaking numbers of new COVID-19 infections clustered around the capital city and its metropolitan sprawl.
According to public broadcaster NHK, estimations from five economic analytics firms forecast the countries economy to shrink if the state of emergency is introduced even for just one month. The estimations range from a 0.3 percent to a 0.88 contraction due to plummeting consumer spending and limits of dining hours.
The analysts further projected that consumer spending would plunge as people would be urged to stay at home as much as possible. And restaurants would have to cut their opening hours.