Japan unveils mega 23 trillion yen stimulus package

Japan unveils mega 23 trillion yen stimulus package

Tokyo: Japan’s Prime Minister Taro Aso on Friday announced a mega 23 trillion yen (about $255 billion) package to boost the country’s economy which has slipped into recession in the wake of worsening global financial turmoil.

The new package primarily aims to bolster the weakening job market and ease the liquidity crunch, the Kyodo News agency has reported.

Quoting Aso, the report said the plan entails fiscal spending to the tune of 23 trillion yen, including one trillion yen to offer housing and other support to temporary workers who have been forced out of accommodations provided by their previous employers.

In addition, another one trillion would be earmarked for local allocation tax to let local governments create new job opportunities.

“The package, which will set aside 13 trillion yen to address the credit crunch, will raise the limit on public funds reserved for injection into banks in a pre-emptive manner to 12 trillion yen from the current 2 trillion yen," the report said.

This is expected to encourage the banks to provide sufficient capital to small and mid size companies, it added.

According to Kyodo News agency, the preemptive injection of public funds has become possible as the Diet passed a revised bank recapitalisation bill earlier in the day.

Further, quoting Aso, the report said that to help mid size and larger companies raise funds, the government would provide 3 trillion yen for such purposes as buying commercial paper issued by them.

The new economic measures come on top of a stimulus package adopted at the end of October and the 10 trillion yen fiscal spending includes 6 trillion yen in the previous package, the report added.