The Japanese government has said it'll compile a huge stimulus package to kickstart the Asian country's flagging economy. The announcement put more pressure on the Bank of Japan to increase monetary easing.
Japanese Prime Minister Shinzo Abe said Wednesday his government would compile a stimulus package of roughly 28 trillion yen ($265 billion, 241 billion euros) to get the ailing economy on its feet again.
Newspaper reports indicated the package would include 13 trillion yen in direct fiscal measures such as boosting spending by national and local governments as well as loan programs.
Abe's announcement via a speech in southern Japan came earlier than expected and pressured the Bank of Japan to match his plan with additional monetary easing at its closely watched rate review ending Friday.
"The amount is so large that the stimulus package is bound to have a big economic impact," said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities.
"The Bank of Japan is likely to ease its policy further, including increasing government debt purchases," he added in a statement.
Details of Abe's package will only be announced next week. But analysts are optimistic that the package will be able to revive an economy dogged by sluggish consumption.
The Nikkei share average rose by 1.7 percent as hopes for more spending boosted stock prices.
hg/jd (Reuters, AFP)