Further to the news back in November that Prime minister Shinzo Abe had given orders for Japan’s first economic stimulus package since 2016 as his government frets about a global slowdown, the impact of higher consumption tax and the risk of a hangover from next year’s Tokyo Olympics, there are fresh headlines hitting the twitter feeds on the matter.
Japan government considering 25 trillion yen economic stimulus package – NHK
As reported last month, and considering the concerns about the health of the global economy, the Japanese government officials had vowed to produce an “agile” and “comprehensive” stimulus that will take advantage of ultra-low interest rates and borrow in order to finance public investment.
Japan’s chief cabinet secretary, Yoshihide Suga, said at the time that, “to speed up our recovery [from natural disasters], deal with risks from abroad and accelerate productivity growth, we are formulating an economic plan along the lines of a 15-month budget.”
FX implications
The plan would hope to boost spending plans that would boost the economy all the way into 2021 and the scale the stimulus is significant, 13T yen would be included fro fresh fiscal spending as well. USD/JPY is unchanged on the news and traders will want to see something formal in an official announcement and a commitment to maintaining higher yields on the longest duration bonds.
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