Japan's Second Stimulus to Include More Direct Spending

Japan’s Second Stimulus to Include More Direct Spending

Posted Wednesday, May 27, 2020 by
Arslan Butt • 1 min read

According to a recent report on Japanese newspaper Mainichi, Japan’s government is expected to roll out a fresh stimulus package worth 110 trillion yen as part of its second budget in the coming days. This package is expected to include plans for direct spending worth 32.5 trillion yen as well, which could help boost the economy that has been ravaged by the coronavirus pandemic.

In the original stimulus plan unveiled, the government had set aside 25.6 trillion yen for direct spending, but with Japan set to experience the worst economic recession since WWII, the second round of stimulus is just as crucial. While the first round of stimulus measures focused on cash payouts to households to stem the initial impact from the pandemic, the second round of stimulus is expected to see the government issue additional bonds.

The second package includes 140 trillion yen worth of financial aid for businesses that have been impacted by the pandemic as well as 10 trillion yen of reserves for emergency spending.

Japanese PM Shinzo Abe has indicated that the total stimulus measures being planned by his government could exceed 200 trillion yen, around 40% of the country’s GDP. While addressing a news conference, Abe commented, “We must protect business and employment by any means in the face of the tough road ahead. We must also take all necessary measures to prepare for another wave of epidemic.”

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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