Japan set to draft fresh economic stimulus

Japan will prepare an outline of fresh economic stimulus measures “as soon as possible”, the government’s top spokesman said yesterday, amid reports that a plan could be ready by the end of the month.

Chief Cabinet Secretary Yoshito Sengoku said the government would draw up stimulus plans in the coming days.

“Given the current situation, we will decide on it as soon as possible,” he told reporters.

His comments came as the Nikkei business daily and other media said the government planned to put together an outline of the fresh economic package by the end of August, citing unnamed government sources.

The daily said Prime Minister Naoto Kan was considering a supplementary budget to pay for the new measures, without citing sources.

Pressure on Japan to produce a bolder economic policy and counter the effects of the strong yen has mounted as stocks fall and slower export growth and weak GDP data point to a slowing ­recovery.

Exports have been crucial to Japan’s post-recession growth but the yen’s current strength against other major currencies harms repatriated overseas profits, while there are fears the strong currency could send more production abroad.

All of which pose a challenge for Prime Minister Naoto Kan’s government as it plans to cut the industrialised world’s biggest public debt, equal to nearly 200 per cent of gross domestic product.