THE JAPANESE GOVERNMENT has introduced plans for a stimulus package worth about $11 (€8.6bn) in an attempt to protect the country’s fragile economy.
The news was revealed on the same day that the European Central Bank announced it would be keeping interest rates at the record low of 1%, and both moves have been seen as an attempt to curb the growing strength of the yen against the dollar.
Japan’s Prime Minister Naoto Kan said that the stimulus plan will include measure to boost employment for graduates, investment in green industries and support for smaller businesses.
The funding for the package is marked to come from reserve funds but the Prime Minister has indicated that an additional budget would be agreed if necessary.
However the market reaction to the announcement of the stimulus package has been described as “lukewarm“.
The move comes a week after the yen hit a 15-year high against the dollar, prompting the Bank of Japan to extend a multi-million dollar loan programme.
Masaaki Shirakawa, Japan’s central bank governor, flew back from the annual monetary symposium in Jackson Hole, Wyoming, for the BoJ emergency board meeting.
The new stimulus package will be ready on 10 September, just days before the nation heads to the polls to vote in a general election.
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