Japan has said it will spend close to $ 10.9 billion on its fresh stimulus package to grapple with the recent upsurge of the yen and downside risks to its economic growth by creating 200,000 jobs and encouraging consumer and business spending.
The package, expected to boost the country's gross domestic product by about 0.3 per cent in inflation-adjusted terms with projects worth a total of $ 0.11 trillion, was approved by the Cabinet of Prime Minister Naoto Kan earlier on Friday.
"We will ensure growth by laying the basis for employment and ensure employment by encouraging growth," Kan told his economic ministers.
Finance Minister Yoshihiko Noda said at a press conference that the government will "implement policies that can rapidly respond" to needs in the economy, while Chief Cabinet Secretary Yoshito Sengoku separately told reporters, "The direction, rather than the size of package, is extremely important."
Sengoku, the government's top spokesman, shrugged off criticism from opposition and some ruling lawmakers that Kan is stinting fiscal spending to boost the economy. Those who are critical of Kan's manner include Ichiro Ozawa, who is challenging him in the leadership election of the ruling Democratic Party of Japan slated for Tuesday.
The government said it "will take decisive actions, including (market) intervention, when necessary" to stem the yen's rise against other major currencies while expressing hope that the Bank of Japan will take "additional necessary policy responses to beat deflation in close collaboration with the government."