Japan’s travel shares plummet after government suspends subsidy program

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TOKYO, Dec 15 (Reuters) – Shares related to travel in Japan fell on Tuesday after the country’s Prime Minister Yoshihide Suga said the travel subsidy scheme would be suspended nationwide around New Year’s to contain an increase in cases of the new coronavirus.

During a coronavirus meeting held on Monday, Suga said he would temporarily halt the program from December 28 to January 11.

The measure comes at a time when Japan has seen a spike in COVID-19 infections. The country reported a record of more than 3,000 daily new cases on Saturday and its capital Tokyo confirmed 621 new cases.

“There is a feeling among people that (Suga’s) suspension measure was rather too late. Indeed, this nationwide suspension would, in the long term, help Japan contain coronavirus infections,” he said. said Takashi Hiroki, chief strategist at Monex Securities.

“So the suspension of the travel program is not necessarily a negative catalyst for the broader market. But it is inevitable that travel-related stocks will be sold off,” he said.

The benchmark Nikkei share average fell 0.27% to 26,659.91 at 0153 GMT, while the broader TOPIX lost 0.44% to 1,782.61.

The airline sector led the declines on the main stock market. ANA Holdings was the index’s biggest percentage loser, slipping more than 6.7% after investors dumped some of its newly issued shares. Meanwhile, shares of Japan Airlines lost 2.8%.

Railway companies also took a hit, with West Japan Railway and Central Japan Railway down 1.07% and 0.21%, respectively.

Elsewhere, travel booking service HIS lost nearly 2.5% as its revenue provided further headwinds as it reported a net loss of 25.04 billion yen for the year ended Oct. 31 on Friday. (Report by Eimi Yamamitsu; edited by Uttaresh.V)

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