Japanese Prime Minister Shinzo Abe yesterday unveiled US$120 billion in stimulus measures to help the world’s third-largest economy overcome the aftermath of the nation’s recent natural disasters.
The package is also aimed at helping the nation alleviate the impact of last month’s tax increase and survive a potential economic slowdown after an Olympic boom.
“We will introduce a daring fiscal policy worth ￥13 trillion [US$120 billion],” Abe told ministers and party leaders at his office.
“We have crafted a powerful policy package,” he added.
The package totals about ￥26 trillion if spending by the private sector is counted, public broadcaster NHK said.
Under the plan, the government is to spend about ￥6 trillion on public investment after a series of natural disasters — including Typhoon Hagibis — caused huge damage to the country’s infrastructure, local media said.
The Japanese economy has so far expanded this year, partially because of strong demand related to preparations for the Olympics, which is to start in July next year.
However, some analysts said the country might suffer a post-Olympic slump.
The package is also aimed at easing the impact of the consumption tax increase to 10 percent from 8 percent on Oct. 1 and helping Japanese firms prepare for a global economic slowdown due to the US-China trade dispute.
The Tokyo market welcomed the package. The benchmark Nikkei 25 climbing 0.71 percent, while the broader TOPIX rose 0.48 percent, or 8.14 points, to 1,711.41.
“In particular, stimulus-related shares such as construction companies benefited from the announcement,” IwaiCosmo Securities Co broker Toshikazu Horiuchi said.
In Tokyo, Obayashi Corp surged 2.44 percent to ￥1,217, while Shimizu Corp rose 3.38 percent to ￥1,099.
However, Japan Research Institute economist Yusuke Shimoda said the impact of the package could be “limited.”
“The package is likely to boost infrastructure-related businesses, but is unlikely to help reform the nation’s slow-growth economy fundamentally,” Shimoda said.
The package would also include government measures to help expand exports of farm products as a bilateral trade accord between Tokyo and Washington is set to take effect next year, Kyodo News said.
The government would also help people in their 30s and 40s, who have been struggling to find work due to past economic slowdowns, to land new jobs, it said.
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