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Economy

Third of Japan CEOs see 3-month emergency wreaking havoc

Even the country's largest companies see threat to business continuity, Nikkei poll finds

Commuters wearing face masks are seen at Tokyo Station on April 10: A survey of top executives finds a fifth worried about the future of their business if the state of emergency lasts three months. (Photo by Kento Awashima) 

TOKYO -- The spread of the new coronavirus is rattling even Japan's largest companies. 

A Nikkei survey of 130 presidents and chairmen of the nation's biggest companies found that 32.7% feel that there will be an impact to their business continuity if the state of emergency lasted three months.

Half of them said they wanted the government to take measures to stabilize employment,  and some asked for more financial support to help with operating cash.

The emergency declaration covers seven prefectures, including Tokyo and Osaka, and runs through May 6. Local authorities have asked people to avoid going out and have placed restrictions on some business activity. The emergency may be extended, depending on the trends in infections, potentially dealing a heavy blow to business.

The survey revealed that just 3.2% are worried that a one-month state of emergency will impact the survival of their business. But if it lasts two months, the figure rises to 7.4% and jumps to 22.1% if it stretches to three months.

The share of those worried about their company's survival reaches 44.3% if the emergency lasts up to half a year, and 50.6% if it continues for up to a year.

"The risk of a prolonged global outbreak cannot be denied," said Isao Teshirogi, CEO of pharmaceutical company Shionogi & Co.

As to the main risks executives are dealing with, ensuring the health of employees topped the list at 90.6%. The second-biggest concern is stagnating business due to restrictions in movement, cited by 64.8% of respondents. Another 18% said cash flow is a problem. Of those who worry about cash flow, 34.8% said they have already secured funds, while 47.8% think they will be able to obtain the funding they need. 

"There is no apparent risk at the moment, but we will diversify our funding sources in case of a long-term impact," said a respondent from a leading construction company.

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