(Adds detail on Tokyo, Kanagawa prefecture)
By Kiyoshi Takenaka and Linda Sieg
TOKYO, March 26 (Reuters) - Japan will set up a new coronavirus taskforce, the government said on Thursday, as it warned of a high risk of a wide spread of the virus but the economy minister said the government was not thinking of declaring a state of emergency now.
Japan has had 1,313 domestic cases of coronavirus as of Thursday morning, separate from 712 from a cruise ship that was moored near Tokyo last month, broadcaster NHK reported. There have been 45 domestic deaths and 10 from the cruise ship.
"I told Prime Minister Abe there is a high risk of coronavirus spreading widely," Health Minister Katsunobu Kato told reporters after a meeting Shinzo Abe and Economy Minister Yasutoshi Nishimura.
Nishimura said Abe told him to "proceed swiftly with setting up the government taskforce" based on Kato's report.
But the government was not considering declaring a state of emergency at the moment, Nishimura said.
Under a law revised this month to cover the coronavirus, the prime minister can declare a state of emergency if the disease poses a "grave danger" to lives and if its rapid spread threatens serious economic damage. The virus has increased Japan's recession risk.
A state of emergency would allow governors in hard-hit regions to take steps such as asking people to stay home, closing schools and other public facilities and cancelling large events.
Japanese shares tumbled on Thursday following three days of big gains after the rise in domestic coronavirus cases stoked worries of tougher domestic restrictions for social distancing.
Hitachi Ltd instructed 50,000 employees at its group companies in Tokyo to work from home and avoid unnecessary outings for the time being.
The decision to set up the task force - a necessary step to declaring an emergency - followed a sharp jump in coronavirus cases in Tokyo, making the capital the epicentre of Japan's outbreak. Tokyo had 212 cases as of Wednesday.
On Wednesday, the governor of Tokyo warned of the risk of an explosive rise in infections in the capital and asked residents to avoid non-essential outings through April 12, especially over the weekend.
"The government and local authorities will cooperate based on the awareness that this is a very critical time to prevent the spread of the virus," Chief Cabinet Secretary Yosihide Suga told a news conference.
The International Olympic Committee and the government on Tuesday agreed to put back the Tokyo 2020 Olympics to 2021 over the outbreak.
Tokyo Governor Yuriko Koike has asked the neighbouring prefectures of Saitama, Chiba and Kanagawa to ask their residents to refrain from non-urgent, non-essential travel to Tokyo, the Nikkei business daily reported.
The governor of Kanagawa, near Tokyo, later asked residents to stay at home this weekend, it reported.
Abe has already told schools to close - although many are now preparing to reopen - and asked organisers to refrain from large-scale events, but his instructions had no formal legal basis.
Even if a state of emergency is eventually declared, legal experts have noted there are no penalties for ignoring most of the local authorities' instructions. But the declaration would put added pressure on people and businesses to obey.
On a sunny three-day break last weekend, crowds of people were out in Tokyo despite bans in some areas on picnics for the traditional spring "hanami" cherry-blossom viewing.
On Thursday, tabloids blared "Tokyo Lockdown Panic" and "Tokyo Destruction".
But a long line of people waited at a chocolate croissant cafe in Tokyo for lunch, while subways were packed and people lined up before drug stores opened to buy masks and sanitary products that are in short supply.
(Reporting by Makiko Yamazaki, Linda Sieg, Elaine Lies, Ju-min Park and Kiyoshi Takenaka; Writing by Linda Sieg Editing by Shri Navaratnam, Robert Birsel)
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