Japan readies $182 billion economic package, no new debt needed: sources

TOKYO Tue Dec 3, 2013 8:20pm EST

Businessmen are seen inside a high-rise office building in Tokyo November 21, 2013. REUTERS/Issei Kato

Businessmen are seen inside a high-rise office building in Tokyo November 21, 2013.

Credit: Reuters/Issei Kato

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TOKYO (Reuters) - Japanese Prime Minister Shinzo Abe is readying a $182 billion economic package this week in his latest bid to pull the economy out of deflation, but the new measures will not require the government to sell more debt.

The package, to be approved by Abe's government on Thursday, will have a headline value of 18.6 trillion yen ($181.6 billion), people familiar with the process said on Wednesday.

That puts the overall package on a par with Abe's 20 trillion yen burst of spending early this year as part of his campaign to end 15 years of falling prices and tepid growth.

But the bulk of the package includes loans from government-backed lenders, spending by local governments and corporations, the sources said. The headline figure usually announced by the Japanese government on economic measures often includes spending that has already been committed, and tends to far exceed the amount of actual new government spending.

The long-expected core of the package will be spending measures Abe ordered in October to bolster the economy ahead of a national sales-tax hike in April, the sources told Reuters on condition of anonymity.

Government officials at the time said the main stimulus steps, to be approved on Thursday, would be worth about 5 trillion yen. Sources said on Tuesday the stimulus will be between 5.4 trillion yen and 5.6 trillion yen.

This amount will not require new debt issuance as it will be covered by tax revenues that have exceeded initial budget projections due to the economic recovery, as well as using unspent funds from other accounts, the sources said.

Measures include steps intended to boost competitiveness; assist women, youth and the elderly; accelerate reconstruction from the March 2011 earthquake and tsunami; and build infrastructure for the 2020 Tokyo Olympics, they said.

($1 = 102.4450 Japanese yen)

(Writing by William Mallard; Editing by Dominic Lau and Eric Meijer)

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Comments (1)
MikeBarnett wrote:
Economic problems in Japan have more impact on the current crisis with China than tiny unhabitable islands that are closer to Taiwan than Japan. The G20 tacitly accepted Japan’s currency manipulation that reduced its value from 80 yen per dollar to 100 yen per dollar, a 25% manipulation. This has failed, and Japan plans to inject $182 billion (18.6 trillion yen) to keep its economy afloat, and it will partially offset this with a national sales tax increase that is not mentioned in this article. The unpopularity of a regressive tax on the poor when bank profits are massive will cause protests unless the Abe regime can divert the masses with a Chinese “threat” against tiny, uninhabitable islands. These small rocks are on the typhoon track, and they would be swept clean every year like Tacloban with typhoons made more powerful each year by global warming.

On the other hand, Japan could sell the islands to retirees each year and resell them each time the owners are swept out to sea and drowned. It’s even better than Sweeney-Todd because Japanese officials won’t need to slit any throats and cover themselves with blood. The ocean will wash the elderly retirees away, and the fish and other creatures will eat the evidence. It is a neat, clean solution to Japan’s economic woes unless China and Russia finally launch a thermonuclear war against Japan over the islands. If all Japanese are burned to death, the dead members of the Abe regime will no longer have any problems. It’s a win-win situation.

Dec 04, 2013 12:49pm EST  --  Report as abuse
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