MercoPress. South Atlantic News Agency

Another stimulus shot for Japan: this time 100 billion US dollars

Japanese Prime Minister Taro Aso announced a fresh spending plan of 100 billion US dollars to rescue the world's second-biggest economy from its deepest recession since the Second World War. The figure amounts to more than 2% of Japan's GDP, Finance Minister Kaoru Yosano told reporters Monday after meeting with Aso.

Yosano said the package is part of the broader international effort to revive the global economy. ”These are the instructions I have received (from the prime minister), so I would like to work toward this goal,“ he said.

Aso revealed last week at the G20 summit in London that he intended to put together a new stimulus package, on top of 12 trillion yen in fiscal steps that the government has implemented since last year.

The latest package will include measures to help contract workers and small businesses, boost regional economies, expand ”green” technologies and support elderly care, said Yasunaga Matsuki, a spokesman at the Ministry of Finance.

Officials aim to finalize details of the latest package by Friday and submit the extra budget proposal to parliament soon after, Matsuki said.

Japan has been hit hard by the global slowdown, which has sapped foreign sales of its cars and gadgets. Exporters including Toyota Motor Corp. and Sony Corp. have cut production and jobs, not only in Japan but also in Europe and North America. Japan’s GDP shrank at an alarming 12.1% annual rate in the October-December period.

Data for February showed that industrial production tumbled, household spending fell sharply, and unemployment rose to a three-year high at 4.4%. A central bank survey found confidence among big manufacturers at its lowest point ever.

Since taking office in September, Aso has repeatedly said that restoring Japan's economy is his top priority. Parliament last month passed a record 88.5-trillion-yen budget for the fiscal year that began April 1, which included parts of Aso's two previous stimulus packages.

Officials declined to comment on where the extra money would come from, though Aso has said recently he would turn to issuing bonds if needed. Japan's massive public debt now equals 170% of GDP, the highest level among industrialized economies.

In contrast, the Bank of Japan is not expected to unveil any major moves when it wraps up a two-day policy board meeting Tuesday. The key interest rate is already at an all time record low of 0.1%. It is also buying commercial paper and corporate bonds to help firms raise funds.