Japan Approves $132b Stimulus
World Economy

Japan Approves $132b Stimulus

Japanese Prime Minister Shinzo Abe's cabinet approved 13.5 trillion yen ($132.04 billion) in fiscal measures on Tuesday as part of efforts to revive the flagging economy, with cash payouts to low-income earners and infrastructure spending.
The package includes 7.5 trillion yen in spending by the national and local governments, and earmarks six trillion yen from the Fiscal Investment and Loan Program, which is not included in the government's general budget, MoneyControl reported.
The stimulus spending is part of a renewed government effort to coordinate its policy with the Bank of Japan, but growing concerns that the BoJ policy has reached its limit triggered the worst sell-off in government bonds in three years.
"We compiled today a strong economic package draft aimed at carrying out investment for the future," Abe told a meeting of cabinet ministers and ruling party executives on Tuesday morning. "With this package, we'll proceed to not just stimulate demand but also achieve sustainable economic growth led by private demand."
The headline figure for the package totals 28.1 trillion yen, but it includes public-private partnerships and other amounts that are not direct government outlays and thus may not give an immediate boost to growth.
Abe ordered his government last month to craft a stimulus plan to revive an economy dogged by weak consumption, despite three years of his "Abenomics" mix of extremely accommodative monetary policy, flexible spending and structural reform promises.
The package comes days after the Bank of Japan eased policy again and announced a plan to review its monetary stimulus program in September, which has kept alive expectations for "helicopter money", printing money for government debt.

JGBs Fall
The review has spooked investors, who are unsure how BoJ policy will change in the future. The price of 10-year JGB futures closed down 0.91 point on Tuesday to 151.33, having fallen 2.47 points in the last three sessions, their biggest three-day fall since May 2013.
The expected appointment of Toshihiro Nikai, an advocate of big public works spending, to the No. 2 post of Abe's ruling party in tandem with a cabinet reshuffle on Wednesday underscores Abe's shift toward his "second arrow" of fiscal policy amid concerns monetary easing is reaching its limits.
Precisely how the spending will be financed is unclear, although the government is considering issuing construction bonds when compiling a supplementary budget later this year.
SMBC Nikko Securities' analysts expect the package will push up real GDP growth by just 0.4 percentage points this fiscal year to March 2017 and 0.04 percentage point next year.

Short URL : http://goo.gl/e7bGrd
  1. http://goo.gl/gPZwjJ
  • http://goo.gl/YBgG4t
  • http://goo.gl/QCdnEN
  • http://goo.gl/FqNzQ4
  • http://goo.gl/IiVpbl

You can also read ...

Household debt topped the list of key systemic risks cited by market watchers at 87%.
South Korea’s growing household debt and geopolitical risks...
The Ritz-Carlton Hotel in Riyadh houses over 200 arrested princes, government ministers  and members of the military on corruption charges.
There has been no big outflow of money from Saudi Arabia as a...
Jordan’s real GDP is forecast to grow at 3% in 2018 and 3.2% in 2019.
Jordan’s economy which has been straddled with mounting debt...
The telecommunications and computers industry saw  flat year-on-year performance in the third quarter.
Singapore’s domestic wholesale trade expanded by 11.3% in the...
IMF expects demand growth for housing to remain robust.
The International Monetary Fund says any pickup in Australian...
The export climate index remains elevated.
Japan’s exports grew 14% over a year earlier in October on...
Michel Barnier during his speech in Brussels, Nov 20, said: Britain would lose its “passporting” rights to let banks automatically do business in the EU after it leaves in March 2019.
European Union Brexit chief Michel Barnier said on Monday the...
Nigeria Recovery Fragile
Nigeria’s economy grew 1.4% year-on-year in the third quarter...