The Curious Timing of Japan’s Stimulus Announcement

by Stratfor
Financial Sense

Now that elections in Japan’s upper house are over, Tokyo has turned its attention toward getting the country’s sluggish economy on track. Japanese Prime Minister Shinzo Abe announced Wednesday a 28 trillion-yen ($265 billion) stimulus package that includes 13 trillion yen in fiscal measures. The stimulus, which has been under discussion for months, will likely be approved by the Japanese Cabinet on Aug. 2. In addition, The Wall Street Journal reported that the country is considering issuing 50-year government bonds for the first time since World War II, although a Ministry of Finance official quickly denied the report.

Several facets of the stimulus proposal are unclear, such as how much of it includes new spending versus programs already planned and announced. It was also not specified how much additional spending will fall under the 2016 fiscal year budget.

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