Japan PM unveils more than $360b stimulus: Media

Japanese Prime Minister Shinzo Abe arrives for the 11th Asia-Europe Meeting (ASEM) Summit of Heads of State and Government (ASEM11) in Ulan Bator, Mongolia on July 15.
Japanese Prime Minister Shinzo Abe arrives for the 11th Asia-Europe Meeting (ASEM) Summit of Heads of State and Government (ASEM11) in Ulan Bator, Mongolia on July 15.PHOTO: REUTERS

TOKYO (AFP, BLOOMBERG) - Japan on Wednesday (July 27) announced a whopping economic stimulus package worth more than 28 trillion yen (S$360.34 billion), media reported, to boost the stumbling economy.

Mr Abe, speaking in the southern city of Fukuoka on Wednesday, said the measures would be compiled next week, Kyodo News reported. It must then be presented to the parliament, where approval is a formality because the ruling coalition has a majority in both houses.

In the days after Mr Abe's ruling coalition won a big victory in the upper-house election on July 10, he ordered that a stimulus package be compiled as he seeks to again revive the economy. Mr Abe met former Federal Reserve chairman Ben Bernanke earlier this month and told him he wants to speed the nation's exit from deflation, underscoring his commitment to stimulus.

 

Japan's Topix stock index has risen more than 9 per cent since the election victory and the yen has weakened almost 5 per cent amid anticipation over the plan.

Some economists have criticized the idea of a new spending package, saying the heavily indebted nation needs structural economic reforms and deregulation more than updated infrastructure.

Japan's economic recovery is at risk as a slowdown in overseas demand and the yen's surge this year are making the nation's products less attractive overseas and hurting the earnings of exporters. Waning corporate profits may weigh on wage growth and household income, complicating the government's attempts to revive the economy.

Mr Abe's stimulus plan comes ahead of the Bank of Japan's policy meeting that ends Friday. Economists expect further monetary stimulus from the BOJ.