Japan’s Shinzo Abe Fires Stimulus, Cabinet Give OK to $73bn New Spending

· Cash Handouts to the Poor

Japan’s cabinet approved a government stimulus package that includes ¥7.5 trillion ($73 billion) in new spending, in the latest effort by Prime Minister Shinzo Abe to jump-start the nation’s sluggish economy.

The spending program, which has a total value of ¥28 trillion over several years, represents not just an attempt to breathe new life into the Japanese economy but a political test for Mr. Abe, who has struggled to deliver sustained growth.

The government will pump money into infrastructure projects, such as upgrading ports to accommodate foreign cruise ships and building food-processing facilities to increase exports of farm products.

The package also aims to offer more help to Japanese who say they haven’t felt many benefits from more than three years of Abenomics, the prime minister’s signature growth program. The government will provide cash handouts of ¥15,000, or about $147, each to 22 million low-income people, bring more workers into a public-pension system by easing admission criteria, and offer more college scholarships.

Mr. Abe had vowed to help more people play productive roles in Japanese society following criticism that his early policies benefited mostly big corporations. Corporate-tax cuts and a weaker yen - the latter a key policy goal of his government–helped send corporate profits to record highs, but most consumers struggled, particularly the 38% of the workforce in temporary, lower-paying jobs.

The yen strengthened further Tuesday after details of the stimulus package were released. The currency had been advancing since last week, when broad outlines of the stimulus program began to be revealed before a Bank of Japan policy announcement on Friday that left investors underwhelmed. The U.S. dollar was down 1.6% in New York afternoon trade, at around ¥100.79.