The Japanese government is planning direct fiscal spending of around 7 trillion yen (€60billion) to help fund an economic stimulus package totalling more than 28 trillion yen, two people briefed on the matter told Reuters yesterday.

That amount – at just a quarter of the total package – could disappoint some market players bracing for bigger outlays given the massive headline figure, equal to more than five per cent of gross domestic product. The total package, to be approved by Prime Minister Shinzo Abe’s Cabinet next Tuesday, also includes six trillion yen for a fiscal loan and investment programme aimed at spurring private-sector spending such as for construction of a ‘maglev’ train line, the sources said.

They spoke on condition of anonymity because the plan has not been finalised.

The remaining 15 trillion yen will come from quasi-government financial institutions that provide loans, loan guarantees and subsidies to private-sector firms, they said.

Following a big election victory this month, Abe instructed his government to craft a stimulus to revive an economy dogged by weak consumption and investment despite three years of his ‘Abenomics’ mix of hyper-easy monetary policy, spending and promised reforms.