Japan yesterday announced plans for a fresh stimulus package worth at least US$100 billion to boost the world’s second-biggest economy as Asian stocks rose further on global outlook hopes.
Japanese Prime Minister Taro Aso said yesterday that he had called on his finance minister to prepare a package worth 2 percent of GDP or more for public spending initiatives.
The deal, part of a supplementary budget bill for this year, would amount to at least ¥10 trillion (US$98.66 billion).
The IMF said in December that countries may have to introduce stimulus measures amounting to more than 2 percent of GDP to reduce the chances of recession. Aso announced the plan, thought to be aimed at helping laid-off workers and cash-strapped companies, last month, but did not say at the time how much it would be worth.
Japan has approved three stimulus plans since October with spending, tax cuts and other measures worth a combined ¥75 trillion, although actual fiscal spending totaled only about ¥12 trillion.
The moves have come as Asia’s biggest economy shrank at an annualized pace of 12.1 percent in the last quarter of last year — its worst in 35 years — as the downturn has dried up demand for its cars, high-tech goods and other popular exports.
Major manufacturers have cut back on production and slashed tens of thousands of jobs since the crisis began. Exports in February dropped nearly 50 percent year-on-year.
In the stock markets, Tokyo closed up 1.24 percent at a three month high, while Hong Kong was 3.4 percent higher after the morning session. Seoul shrugged off a weekend missile launch by North Korea to end 1.1 percent higher.
The gains followed another strong finish Friday on Wall Street, which closed 0.5 percent higher and above the key 8,000 point level for the first time since early February.
The NIKKEI was boosted by a weaker yen as investors move out of the safe haven currency.
In Hong Kong, traders took heart from comments chief executive Donald Tsang (曾蔭權), who said he could adopt further economic stimulus measures later this year to fight the financial downturn.
He said in an interview with the Financial Times that the city had HK$400 billion (US$51.6 billion) in the bank “so I’m in a good position to spend more if I want to … If necessary we will do something in the middle of the year.”