Japan plans to bolster economy with new €40bn stimulus package
Japan will craft an economic stimulus package this week worth about €40bn to bolster the economy ahead of an increase in the national sales tax in April, people familiar with the process said yesterday.
The size of the package, ordered in October by Prime Minister Shinzo Abe, will be between 5.4 trillion yen (€38.8bn) and 5.6 trillion yen, sources told Reuters on condition of anonymity.
Taoiseach Enda Kenny is in Japan this week on an official visit to the country where Prime Minister Abe has launched a massive economic revival programme aimed at lifting the country out of decades-long stagnation that followed a property and stocks bubble in the 1990s.
In the latest element of the programme, government ministers have said the new stimulus package needs to be at least 5 trillion yen to soften the economic blow of the April tax hike – Japan's biggest step in decades toward curbing its enormous debt.
The government will craft an "effective" package amounting to "as much as possible above 5 trillion yen", Yasuhiro Hanashi, a parliamentary finance secretary, told a panel of Mr Abe's Liberal Democratic Party.
The government is to decide on the measures tomorrow, but precise amounts will not be spelled out until the cabinet approves a supplementary budget on December 12, the sources said.
Sources said last week that the budget, including the stimulus measures, would be worth some 7 trillion yen.
The BOJ's massive monetary easing and Mr Abe's hefty government spending have had early success in lifting Japan from 15 years of deflat- ion and tepid growth. (Reuters)