Japanese Prime Minister: Considering Additional Economic Stimulus

Discussion in 'Wall St. News' started by ASusilovic, Aug 16, 2010.

  1. TOKYO (Nikkei)--Prime Minister Naoto Kan said Monday that the government may offer another round of stimulus measures in a bid to underpin the economy.

    On Monday, Kan instructed Minister of Economy and Fiscal Policy Satoshi Arai, Minister of Finance Yoshihiko Noda and Minister of Economy, Trade and Industry Masayuki Naoshima to examine the current economic conditions and report back with specific proposals.

    Japan's preliminary real gross domestic product showed a tepid 0.4% growth for the April-June quarter, while a strong yen and weak stocks threaten to derail the economic turnaround. "We need to closely monitor developments, along with currency conditions," Kan told reporters at his official residence.

    The stimulus steps could include extending such consumer spending incentives as the eco-point program for energy-saving electronics, which is set to expire at the end of December. Programs to support job-hunting graduates and measures to aid small and midsize businesses beleaguered by a strong yen are also believed to be in the works.

    The government is expected to have around 900 billion yen in leftover funds in the fiscal 2010 budget originally earmarked for the economic crisis and regional revitalization. And an additional 800 billion yen of surplus money from the fiscal 2009 budget gives it a combined 1.7 trillion yen to fund additional stimulus.

    But government officials are reluctant to increase bond issuances, citing concerns about the nation's deteriorating finances.

  2. is it too late for him to think about that?
  3. Round two in Japan (if it happens) is not supposed to be significant from what I've been reading. More stimulus would be used primarily to bring down the value of the yen, or at least hold it steady. As the article mentions, Japan's financial sitaution is not great, so the scope of more stimulus is certainly limited. I would watched the JPY for more clues on this.
  4. TGregg


    That's great. At some point, all this government debt is like a heroin addiction. It's tough to quit, but you gotta do it. The longer it takes you to quit, the harder it's gonna be. And part of the solution is not (I repeat *NOT*) taking a couple "small" trips.

    But hey, if Japan's ready to tie up and inject another round, go ahead. At least we'll have yet another example to point to, they'll be yet another member of the Don't Let This Happen To You crowd.