TOKYO -- Shares in transportation and retail companies in Tokyo weakened on Monday after the governor of Osaka revealed plans to seek another state of emergency for his prefecture, which is battling a surge in new coronavirus infections.
Companies that have a big presence in Osaka and its surrounding areas were especially hit hard as investors fear the prefecture's relapse into a third COVID emergency will lead to a decrease in demand during the upcoming Golden Week holidays and dampen earnings.
Shares in Keihan Holdings, which provides local railway and bus transportation and whose subsidiary includes Keihan Electric Railway, fell 3.4%. Shares in Kintetsu Group Holdings, the owner of Kintetsu Railway and Kintetsu Department Store, also dropped over 3%. Other transportation stocks like West Japan Railway, as well as Nankai Electric Railway, declined around 2%.
Retailers also suffered. Department store operator Takashimaya's share price fell 2.5% while H2O Retailing Corp. stock declined 1.5%. As of last September, Osaka-based H2O Retailing manages eight Hankyu department stores in the Kansai region, which includes Osaka and Kyoto Prefectures.
Restaurant operators like Fujio Food Group, which manages chains like Maidoookini Shokudo, also saw its stock price fall 1.5%.
On Monday, Osaka Gov. Hirofumi Yoshimura announced that he would ask the central government to declare a state of emergency for his prefecture due to a rise in COVID-19 infections. Osaka's daily cases have been topping 1,000 in recent days. On Sunday, it reported its highest daily count ever with 1,220 new coronavirus cases.
Yoshimura told reporters on Monday, "We need strict measures that will halt the movement of people."
He is expected to make a formal request to the government on Tuesday. In the event that a state of emergency is declared, the governor said he would ask restaurants and other nonessential businesses like department stores and theme parks to close for a while.
Japan's Golden Week holiday starts late April. However, with the government calling on people to refrain from making unnecessary domestic trips and now with Osaka moving toward a third COVID emergency, businesses hoping for a boost after a difficult year now face more disappointment.
Around the same time last year, the government declared a nationwide state of emergency as the pandemic gained pace throughout the world. Japanese cities and towns were deserted then as citizens stayed home during Golden Week.