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Business trends

Japan Inc. falls into line as state of emergency looms

Companies back efforts to curb coronavirus by implementing more teleworking

A handful of commuters appear on the streets of Osaka on Monday. Companies there and in Tokyo are already rushing to implement homeworking measures. (Photo by Tomoki Mera) 

TOKYO -- Hundreds of thousands of Japanese company employees prepared for a long period of home working on Monday as prime minister Shinzo Abe made clear that his government would declare a state of emergency in response to the coronavirus pandemic.

Authorities in and around Tokyo and Japan's other big corporate hub of Osaka, as well as Fukuoka, are expected to request that the public stay at home, as part of efforts to curb the spread of coronavirus infections. But the country's constitution gives limited legal authority for curbs on public movement, so large companies' backing for the declaration will be vital.

Even in advance of an official government announcement, companies have been adapting their practices to accommodate more home working. The changes have been remarkable in Japan, where work culture usually revolves around putting in long hours in the office. Peak time usage on the Toei subway system, one of two in Tokyo, is a third below its level in January, before concerns over coronavirus began.

"Japanese companies will likely expand their telework initiatives as well as make decisions to reduce business hours given the declaration," said Hajime Shoji, managing director at Boston Consulting Group in Japan. Companies that provide infrastructure such as power and telecoms, and retailers that sell everyday products "will be faced with the task to comply with the declaration while also maintaining minimum operations that will sustain daily life," he added.

On Monday, 20,000 Sony employees began working from home under company orders. Sony has asked the workers to telework in principle and required them to seek approval from their bosses if they need to visit the office. The company had already allowed employees to work up to 10 times a month from home before the coronavirus outbreak. "We were prepared and our teleworking has gone smoothly," the company said. Its factory workers are not affected.

Osaka-based Panasonic instructed approximately 80,000 personnel across Japan to work from home if possible in late February. "We have already taken as many measures as possible, and will consider further measures after looking carefully at the government announcement," the company said.

Honda Motor has almost 10,000 employees teleworking across Tokyo and adjoining Saitama Prefecture, adopting experience from a large teleworking campaign last summer, which was launched by the government to head off expected congestion during the 2020 Tokyo Olympics.

The Olympics have now been postponed but the lessons from the experiment -- which involved 680,000 people from more than 2,800 companies -- are now being used to respond to the coronavirus. "So far we haven't seen any difficulties implementing the work from home system," Honda said.

In the financial sector, brokerages have required many personnel to work from home in the past month or so. Investment bankers and wealth managers are asked to avoid in-person meetings with clients as much as possible.

But banks have tended to maintain on-site operations as they deal with many business borrowers facing funding issues and challenges around the end of the fiscal year on March 31.

On Monday MUFG Bank said that it would "continue to provide financial services to support our customers' fund settlement, business funding and other needs, even if a state of emergency is declared."

"In principle, we will keep all of our branches open, but we are currently considering our response, taking into account factors such as customer numbers and waiting time," MUFG said. "We are considering measures for implementing flexible operation of branches in response to local conditions such as reducing the number of teller windows, adjusting front office support, and alternating shifts within areas." Last week the company started to ask customers to wear masks in branches and to consider using alternative means for banking, such as online banking.

Nomura Holdings said it was working on procedures to maintain important operations, such as capital markets and settlements, during the state of emergency, while Mitsui & Co. said it was discussing how to step up its business continuity planning operations. Since February, Mitsui has been implementing measures such as remote work and dividing workers into shift groups.

Japan Exchange Group, which operates exchanges in Tokyo and Osaka, said, "There are no plans to close the exchanges and the markets will remain open." 

Japan's three major mobile network operators are appointed by the government as "designated public institutions" and are required to maintain telecommunications services during a state of emergency.

Many employees are already working from home but those with key roles like equipment maintenance and call center operations are likely to continue going to offices.

A state of emergency would come at a difficult time for e-commerce group Rakuten, which plans to start its mobile network service on April 8. The company has temporarily closed 72 of about 560 mobile phone shops nationwide and plans to close more, but users can register from its website and have SIM cards delivered to their home. Rakuten said it would start using drones to inspect base stations.

Reporting by Mitsuru Obe, Eri Sugiura, Rurika Imahashi, Jada Nagumo, Akane Okutsu and Wataru Suzuki

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