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Japanese Prime Minister Shinzo Abe crossed he wires and said that direct fiscal spending under the government’s stimulus package to combat the coronavirus pandemic will total 39 trillion yen ($357 billion), Jiji news agency reported on Tuesday, according to Reuters News.

Key notes

  • Abe pledged on Monday to roll out an unprecedented economic stimulus package worth 108 trillion yen – equal to 20% of economic output – as his government vowed to take “all steps” to battle deepening fallout from the coronavirus.
  • The package, to be confirmed by the cabinet on Tuesday, will total 108 trillion yen ($989 billion), far exceeding one compiled in the wake of the 2009 financial crisis totalling 56 trillion yen in size, with fiscal spending of 15 trillion yen.
  • “We decided to carry out an unprecedentedly massive scale of economic package worth 108 trillion yen, or 20% of GDP, following the immense damage to the economy from the novel coronavirus,” Abe told reporters after a meeting with senior ruling party lawmakers.
  • Abe stopped short of providing further details, but the amount may include earlier economic measures valued at 26 trillion yen, which were adopted at the end of last year to cope with risks from the Sino-U.S. trade war.
  • Still, the package turned out far bigger than the amount anticipated by market players, giving a sense of security for people facing income declines and staying indoors, some analysts say.

This news follows the announcement that a state of emergency as early as Tuesday would be declared. The cases of COVID-19 have been ramping up to alarming levels. the yen has come under pressure are markets considering, again, the Japanese dire economic outlook and wat an outbreak would mean for the nation’s fragile economy.