Japanese government approves $154 bn stimulus plan

TOKYO: The Japanese government and the ruling coalition parties finalised an additional stimulus plan on Friday to pull the nation's economy out of the worst recession of the postwar era.

Japan's third stimulus package since September is to inject 15.4 trillion yen ($154 billion), worth 3 percent of the gross domestic product, into the world's second largest economy in what is considered the nation's largest-ever stimulus plan.

After including other non-spending measures and loan guarantees, the package totals 56.8 trillion yen.

The government is expected to submit a supplementary budget for the current fiscal year that began April 1 to parliament April 27.

Prime Minister Taro Aso said the fresh measures are intended to "avert a freefall of the economy at all costs, secure jobs and alleviate people's pains, and boost Japan's future growth", according to media reports.

To finance the extra budget, the government would issue deficit-covering bonds worth about 8 trillion yen, bringing the total amount of bond issuance in fiscal 2009 to a record-high of 44 trillion yen.

"The upcoming budget will involve extremely large outlays," Finance Minister Kaoru Yosano said at a press conference Friday. "We also have to incorporate an idea to improve the nation's fiscal health to strike a balance."

The measures are to encourage ecologically friendly facilities and products, help create jobs, stimulate consumption, assist companies' funding and provide support for child-raring, the government said.

Aso announced plans to revise Japan's consumption tax as well as gift tax.

The Japanese premier Thursday promised to create 1.4 million to 2 million new jobs in the next three years, while aiming in the long term to increase the nation's real GDP by 120 trillion yen ($1.2 trillion) and create 4 million new jobs by 2020.

The government's stimulus plan helped boost Tokyo markets Friday, pushing the benchmark Nikkei 225 Stock Average above the 9,000-points level for the first time in three months.