Japan announces $45bn fiscal stimulus package

Added 2nd August 2016

Japan is set to launch $45bn (£34bn, €40.2bn) of new fiscal stimulus measures after Prime Minister Shinzo Abe and the cabinet gave the plan the go ahead.

Japan announces $45bn fiscal stimulus package

The move follows a protracted effort to stimulate the Japanese economy through monetary policy, which has had limited success.

The fiscal package includes new money for infrastructure projects such as new train lines and funds for local governments to spend.

There will also be some increased benefits paid out to people on low incomes and fresh money to help with the continued recovery from the 2011 earthquake and resulting tsunami.

Abe described the measures as a strong package that is an investment in future of Japan. He said it will stimulate demand and promote sustainable economic growth.

The move follows last week’s announcement that monetary stimulus measures are being kept at current levels for now, with no ‘helicopter money’ being issued at this stage.

Investors have appeared relatively unimpressed by the announcement so far, with Japan’s Nikkei 225 down 1.5% at 16,391.

The Japanese Yen strengthend slightly against the US dollar, rising 0.6% to leave a dollar worth 107.7 Yen. 

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Alex Sebastian

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Alex joined Portfolio Adviser in April 2014 and has been a financial journalist since 2008. He has previously held editorial positions at the Financial Times Group and Euromoney Institutional Investor. Alex is NCTJ qualified and has a degree in economics from the University of Sussex.

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