PremiumJapan is expected to announce a huge stimulus package today, Friday. However, the central bank refused to budge from the ultra-loose policy that has hammered the currency.
With an aim to cushion the economy from the impact of a weak yen and inflation, Japan is expected to announce a huge stimulus package today, Friday. However, the central bank refused to budge from the ultra-loose policy that has hammered the currency, according to the news agency AFP.
Ahead of cabinet approval for the relief measures, Japanese Prime Minister Fumio Kishida said that the government would seek 'swift approval' of an extra budget worth 29.1 trillion yen (around $200 billion).
The government has been preparing for about $490 billion in stimulus spending to help the world’s No. 3 economy cope with inflation.
Currently, prices are rising in Japan at their fastest rate in eight years, although the 3% inflation rate remains well below the sky-high levels seen in the United States and elsewhere.
The yen has also lost more than a fifth of its value against the dollar this year, prompting authorities to intervene to prop up the currency.
The spending package is expected to include measures to encourage wage growth and support households with energy bills, which have spiked since Russia's invasion of Ukraine, as per AFP reports.
Local media including the Nikkei business daily, as quoted by AFP, said total fiscal spending on the measures could be as high as 39 trillion yen, a figure that could rise to 71.6 trillion yen when private-sector investments that ministers hope will also be made are taken into account.
Japan, which has one of the world's highest debt-to-GDP ratios -- has already injected hundreds of billions of dollars into its economy over the past two years to support recovery from the Covid-19 pandemic.
The Bank of Japan (BoJ), after a two-day meeting, on Friday said it would continue to keep its easy policy, defying growing pressure to tweak its strategy as the yen declines.
Interestingly, India is inching closer to overtake Japan as Asia's second largest economy and third largest in the world.
(With AFP inputs)