Japan may resume domestic travel subsidies in mid-January, according to Nikkei.

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According to the Nikkei newspaper on Sunday, Japan’s government is considering reinstating subsidies targeted at increasing domestic tourism as early as mid-January.

The decision will relieve pressure on airlines and hotels, which have been affected hard by the coronavirus pandemic’s reduced travel, and emphasise officials’ ambitions for reviving the economy through pent-up demand.

The funds will be included in Prime Minister Fumio Kishida’s new pandemic-relief plan, which is set to be released on Friday.

As COVID-19 infections began to rise, Japan halted in December a programme that used taxpayers’ money to offer domestic tourists discounts for hotels and domestic travel fees.

On request from the tourism industry, the government will consider resuming the programme from mid-January or February, until around late April, the Nikkei said.

The government will offer bigger discounts for travel during the weekdays compared with those on the weekend, to avoid trips being concentrated during the weekend, the paper said.

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It will also lower the maximum amount of discount offered per travel compared with the previous programme, the Nikkei said without citing sources.

The government was not immediately available to comment.

Japan’s economy likely contracted an annualised 0.8% in the third quarter as supply constraints and state of emergency curbs to combat the pandemic hit exports and consumption, according to a Reuters poll. read more

Analysts expect consumption to pick up after the Sept. 30 end of the curbs, though slowing Chinese growth and lingering supply bottlenecks cloud the outlook for the export-reliant economy. The government will release preliminary third-quarter gross domestic product data on Monday.

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