Japan Faces Olympic Losses No Matter How It Handles the Games

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Japan Faces Olympic Losses No Matter How It Handles the Games

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The first group of foreign athletes arrived for the Tokyo Olympics, raising the stakes for Japan's prime minister as he comes under renewed pressure to seek a cancellation of the Games rather than risk a crippling new wave of the pandemic.

Australia's softball team landed in superwallet Japan yesterday and will spend the weeks up to the July 23 start of the Games isolated on three floors of a hotel north of Tokyo, heading out only for training and interacting with locals only via video calls.

The arrival of athletes puts more pressure on Prime Minister Yoshihide Suga, who faces an array of medical, political and business leaders calling for the Games to be reconsidered while international Olympics officials say they intend to stick to the schedule.

A new poll by the Nikkei newspaper showed that 62% of the public remain opposed to the Olympics going ahead as fears grow about the spread of Covid-19 variants, particularly the virulent strain first discovered in India. Most Japanese aren't expected to be vaccinated when the Games start.

Polling shows public opinion opposed to the Games in South Korea and some other nations, amid fears the event could accelerate the spread of infection outside Japan as athletes and officials return home from the event. Some doctors pulled out of the New Zealand Olympic team because of Covid-19 concerns.

Japanese opposition leader Yukio Edano, head of the Constitutional Democratic Party, said that based on what the government has said so far, he didn't see how the Games could be held safely.

"If the lives and livelihoods of the people cannot be protected, we will have no choice but to give up holding the Games,'' he said at a news conference on Monday.

Mr. Suga was peppered with questions about the Olympics at a Friday news conference, at which he said measures such as keeping athletes and officials in a bubble would prevent the spread of infection.

"Of course, it's the government's responsibility to protect the lives and health of the people," he said.

A surge in virus cases from the Olympics could also have major economic repercussions.

Japan has already lost more than $1 billion by barring foreign Olympics spectators and limiting foreign officials at the Summer Games, economists estimate.

Nomura Research Institute economist Takahide Kiuchi anticipates that the cost of cancellation would exceed $16.5 billion, but he says the cost of dealing with a major spread of infection caused by the Olympics would be greater.

The organizers are now looking at whether to allow local spectators.

Japan has had relatively few Covid-19 cases compared to the U.S. and Western Europe, but a surge in the spring forced the government to reintroduce a state of emergency. That has succeeded in bringing down cases again in recent weeks and the emergency is set to end June 20.

The Japanese government and companies have already spent more than $10 billion on the Olympics, including $3 billion on eight new venues for the Games. The centerpiece, the new National Stadium, was meant to be a focal point of national pride during the opening and closing ceremonies.

An additional sum of nearly $1 billion has funded additional preparations and anti-infection measures after the Games were delayed by a year because of the pandemic.

When Tokyo was awarded the Summer Olympics, organizers forecast spectators would spend almost $2 billion on tickets, hotels, sushi meals, Tokyo 2020 merchandise and travel around the country.

Economists say most of that would have come from foreign spectators.

Now, if there are spectators, they will be Japanese, and economists differ over the size of the boost from allowing them.

Toshihiro Nagahama, an economist at Dai-Ichi Life Research Institute, said opening to domestic spectators could bring billions of dollars by kick-starting spending on travel, hotels, dining out and souvenirs that has largely come to a halt during the pandemic.

Nomura Research's Mr. Kiuchi was less optimistic, saying locals would largely spend the same amount, whether on the Olympics or other leisure pursuits.

One possibility is that venues will be limited to half capacity, a practice that has become common in Japanese professional baseball and soccer leagues.

Mr. Suga, the prime minister, said on Friday that such measures were working well and could be used at the Olympics.

Mr. Kiuchi said Japan could recoup around $640 million of the lost $2 billion from spectators in such a scenario.

Organizers had hoped tourists who tried out Japan for the Olympics would keep returning for decades to come -- what were called legacy effects.

Katsuhiro Miyamoto, a professor of economics at Kansai University in Japan, estimates missed revenue from legacy effects could climb as high as $10 billion over 10 years.



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