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Japan outlines $150bn stimulus | Japan outlines $150bn stimulus |
(19 minutes later) | |
Japan has unveiled its record $150bn (£105bn) stimulus package as it seeks to revive its flagging economy. | Japan has unveiled its record $150bn (£105bn) stimulus package as it seeks to revive its flagging economy. |
Prime Minister Taro Aso announced the package, worth about 3% of its gross domestic product, in Tokyo after the ruling party approved the measures. | Prime Minister Taro Aso announced the package, worth about 3% of its gross domestic product, in Tokyo after the ruling party approved the measures. |
The 15.4tn yen package, to be formally unveiled on Friday, includes measures to boost fuel-efficient vehicles and consumer electronics. | The 15.4tn yen package, to be formally unveiled on Friday, includes measures to boost fuel-efficient vehicles and consumer electronics. |
Shares in Tokyo gained as details of the stimulus plan were announced. | Shares in Tokyo gained as details of the stimulus plan were announced. |
'Opportunity' | 'Opportunity' |
"Only countries that can turn a challenge into an opportunity can prosper in the future," Mr Aso said. | "Only countries that can turn a challenge into an opportunity can prosper in the future," Mr Aso said. |
The consequences over the longer term are negative as we are piling up more of a fiscal burden Masamichi Adachi, economist Japan pushes new stimulus plan | |
The stimulus plan, the government's third in the past year, is bigger than many analysts had expected. | The stimulus plan, the government's third in the past year, is bigger than many analysts had expected. |
It also creates a financial safety net for temporary workers, boost struggling firms and support regional economies. | |
Earlier in the week, Finance Minister Kaoru Yosano had suggested that the stimulus would be more like 2% of GDP. | |
Mr Aso had previously said he would not hesitate to issue new government bonds to cover the cost of the proposed steps. | |
The country is going through its worst recession since World War II as the global financial downturn sapped demand for its exports. | The country is going through its worst recession since World War II as the global financial downturn sapped demand for its exports. |
Shares higher | |
Japan's benchmark Nikkei 225 index closed at a three-month high, rising 3.74% to finish at 8,916.06. | Japan's benchmark Nikkei 225 index closed at a three-month high, rising 3.74% to finish at 8,916.06. |
Shares in carmakers and solar power-related firms gained after details of the draft plan were released. | Shares in carmakers and solar power-related firms gained after details of the draft plan were released. |
"This may contribute to GDP for a year," said Masamichi Adachi, an economist at JP Morgan. "The consequences over the longer term are negative as we are piling up more of a fiscal burden. Bond issuance will go up from here on." | "This may contribute to GDP for a year," said Masamichi Adachi, an economist at JP Morgan. "The consequences over the longer term are negative as we are piling up more of a fiscal burden. Bond issuance will go up from here on." |
The package came out as figures showed Japan's machinery orders unexpectedly rose in February thanks to gains in the services sector. | The package came out as figures showed Japan's machinery orders unexpectedly rose in February thanks to gains in the services sector. |