Japan unveiled on Tuesday a fresh 7.2 trillion yen stimulus package to help shore up the flagging economy, troubled anew by continued price falls and the negative impact of a strong yen on exports.
Despite a serious fall in tax revenue, the government led by the Democratic Party of Japan decided to increase package from 7.1 trillion yen to 7.2 trillion yen at the last minute.
The package is focused on improving employment conditions, corporate financing of small and mid size firms, and boosting private consumption.
Of 7.2 trillion yen requiring national expenditures, about 3.5 trillion yen will be earmarked for steps to help ease impact of the recession on Japan's regional economies.
The 7.2 trillion yen package will have effects worth around 24.4 trillion yen, according to the government.
The additional stimulus measures will be financed by the upcoming second extra budget for the year through March 31.
Finance Minister Hirohisa Fujii told a news conference that the Cabinet aims to put together the supplementary budget by next Tuesday. The draft will be submitted for approval to the regular Diet session starting in January.
Fujii said the Japanese government's debt will top tax revenue in fiscal 2009 for the first time since 1946.
"Our country's fiscal situation is extremely serious," Fujii said.
The Cabinet failed Friday to strike a deal on the size of the package as it had initially planned because PNP chief Shizuka Kamei strongly urged that the package be much larger than 7.1 trillion yen.