Japanese Prime Minister Shinzo Abe is planning a stimulus package with a headline figure of $255 billion to reflate the flagging economy, Fuji TV said, though it is uncertain how much of it will consist of government spending.
Abe will announce details of the package, including the total size of around 27 trillion yen ($255 billion) on Wednesday afternoon, the TV station reported, citing government officials.
Thirteen trillion yen will be spent by national and local governments as well as cheap loan programmes offered to private-sector projects by semi-government financial institutions, Fuji TV said.
After the annoucement that Prime Minister Shinzo Abe will announce an economic stimulus package worth 27 trillion yen which is 225 billion in US dollars, Japan’s Nikkei share average rose more than 2.5 percent on Wednesday afternoon. The Nikkei jumped as high as 2.7 percent to 16,821.43 in early afternoon trade. If it rises above 16,938.96 hit last Thursday, it will be the highest in eight weeks.
Abe has ordered his government to craft a stimulus plan to revive an economy dogged by sluggish consumption and investment, despite three years of his “Abenomics” mix of hyper-easy monetary policy, spending and promised reforms.
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Government sources have told Reuters the package will have a headline figure of at least 20 trillion yen.
But only about 3 trillion yen would come from direct spending by national and local governments, they said, with the rest comprised of loan programmes and state subsidies to inflate the total size.