The
Japanese government will spend 1 trillion yen ($12.3 billion) on a second round
of fiscal stimulus as it tries to revive an economy at risk of sliding into
recession.
The
government will tap reserve funds from this fiscal year’s budget, Chief Cabinet
Secretary Osamu Fujimura told reporters in Tokyo on 19 November. The latest
measures follow the announcement of 750 billion yen of stimulus last month.
Economy
Minister Seiji Maehara said last week that using
reserve funds won’t be enough to support the economy and the government should
compile a supplementary budget. The Bank of Japan (8301) refrained from adding
to monetary stimulus.
The
dissolution of the Diet prior to the election on Dec. 16 may restrict the
government’s ability to stimulate an economy that risks its third technical
recession since 2008.
The
economy will contract an annualized 0.4 percent in
the September-to-December period according the median forecast in a survey of
economists by News Agency after shrinking 3.5 percent
in the third quarter. A textbook recession means two straight quarters of
contraction.
Japanese
recessions are officially defined by a government-charged panel that considers
data beyond GDP figures.