Japan unveils 56trn yen stimulus package

Japan’s Prime Minister Fumio Kishida unveiled a 56 trillion yen stimulus package on Friday to help the economy to recover from the impact of the pandemic.

The package, which is much bigger than the 30 to 40 trillion stimulus markets had been expected, is set to reach just under 79 trillion yen.

"In a time of emergency we must put together what is needed to protect the lives and incomes of people," Kishida told reporters.

"First we have prepared an economic stimulus policy, then we will discuss an extra budget employing all funding options including deficit bonds. Reviving the economy, then thinking about the fiscal situation: That’s the order," he said.

The package, which includes cash handouts to businesses and households, will need parliamentary approval before being enacted.

Pantheon Macroeconomics economist Craig Botham said: "At 10% of GDP in total, this stimulus outstrips Japan’s prior pandemic responses, though there is ‘only’ 5.7% of GDP in new money, in the form of a supplementary budget.

"Weaker-than-expected GDP for Q3 will have added to a sense of urgency, though we think the planned consumer stimulus comes too early, given Covid remains the main constraint."