The Japanese government hopes to increase output and rein in deflation. Japan's Coast Guard will also get more because of higher cost due to the territorial dispute with China.

Tokyo (AsiaNews/Agencies) - Japan's cabinet approved a 422.6 billion yen (U$ 5.3 billion) economic stimulus package on Friday. It includes more money for the Coast Guard, which has spent more than expected because of the dispute with China over the Diaoyu/Senkaku Islands.

The move was decided because something had to be done. With money coming from reserve funds, a government spokesperson said the stimulus should "lead to an exit from deflation and jumpstart the economy."

However, the move was expected to put pressure on the Bank of Japan to extend its 80 trillion yen asset-purchase scheme after a policy meeting next week, analysts said.

Japan's economic crisis stems from the US recession; however, domestic political instability since 2005 and the decision to shut down nuclear plants have made matters worse.

Without domestic sources, Japan must now spend 30 per cent more to meet its energy needs from abroad.

 

• japan
• stimulus
• package
• china
• dispute