Taro Aso announced the second stimulus package since he became Japan’s prime minister in September, a bid to reverse a plunging approval rating ahead of elections.
Japan will allocate 10 trillion yen ($110 billion) to buoy the world's second-largest economy, an amount that includes 6 trillion yen already announced in October, the government said in a statement distributed to reporters in Tokyo.
Mr Aso hasn't yet submitted a bill to parliament to fund the October measures. "This is a desperate attempt by Aso to recover support," said Minoru Morita, an independent political analyst and author of a book on Japan's ruling Liberal Democratic Party.
Mr Aso (68) has come under increasing pressure to address a deepening recession as companies such as Toyota Motor and Sony fire thousands of workers.
Gross domestic product contracted at an annual 1.8 per cent pace in the third quarter and the yen climbed to 88.58 versus the dollar today, he strongest since 1995, eroding the value of the country's exports.
Support for Aso's Cabinet has fallen by more than half since he took office, to 20.9 per cent in a Yomiuri newspaper poll published December 8th.
Mr Aso promised to prioritize growth over balancing the budget during his campaign. The government will devote 1 trillion yen to aid unemployed workers, including housing assistance, according to the statement.
"The government wants to ease the public's anxiety and take measures to end the recession earlier than other industrialized nations," Mr Aso said in a speech on NHK television.
Japan's finance minister Shoichi Nakagawa said today that employment conditions are becoming "severe".
The 10 trillion yen allocation includes about 3 trillion yen in fresh spending that needs to be financed by the budget for next fiscal year, according to the Ministry of Finance.
Reuters