Scrapping the Tokyo Olympics would inflict further damage on a Japanese economy already teetering on the brink of a double-dip recession, according to economists.
While Prime Minister Yoshihide Suga insists the games will go ahead, he looks set to extend a virus emergency until the middle of June, barely a month before the Olympics are due to start. Analysts factoring in a longer emergency now see a larger chance of Japan suffering a second straight quarterly contraction.
A last-minute ditching of the games on top of an extended emergency would inflict extra pain on the economy, slowing a hoped-for recovery in the summer and knocking back growth this year by as much as 1.7 percentage point, according to Bloomberg Economics’ Yuki Masujima.