Prime Minister (PM) of Japan Naoto Kan yesterday has requested additional stimulus spending new years 2010-2011 (April 2010-March 2011) amounted to $ 60 new billion. Stimulus is intended to boost the Japanese economy continues to decline.
“It will require an additional stimulus in the cabinet meeting,” according to Kyodo News reported in a report published yesterday.
Meanwhile, the business newspaper The Nikkei estimate the additional spending by 4-5 trillion yen (USD47-59 billion). Kan step illustrates the increasing concern on the Japanese government officials on current economic conditions.
Officials argue there should be additional action to address the weakening of export markets and the strengthening of the yen against the dollar. If not addressed, the risk would threaten Japan’s recovery is progressing slowly. On the agenda of the previous Kan, the Japanese government asked focused effort to implement spending cuts and reduction of public debt has reached 200% of GDP.
This agenda seems to be evaluated due to political pressure about the handling of continued weakening Japanese economy. The strengthening yen until it reaches the highest position for 15 years forced the Japanese government’s first intervention since 2004.
Intervention is intended to help decrease the benefits exporters and prevent the drastic decline that could bring the Japanese economy back into recession. Beginning last September the Japanese government also has approved a new stimulus package worth 915 billion yen.
Stimulus funds allocated to create 200,000 new jobs and boost the GDP by 0.3 percent. But, economists and politicians criticized the new policy. They assess the amount of additional stimulus is less so it is not effective.