In order to respond to potential deflationary pressure and stimulate the economy and to win political support, the Government of Japan has announced a scale Tuesday 7.2 trillion yen (810 million) of the new stimulus plan. This is Hatoyama Cabinet since first stimulating case, Japan since August last year launched the fourth round of stimulating case, therefore, Japan has announced fiscal stimulus size has reached 3260 billion.
Scale higher than expected
Japan Government Tuesday announced including 7.2 trillion yen budget expenditures, new economic stimulus plan. Currently, Japan's economy is facing multiple challenges: the Yen's appreciation against the deflation of export, as well as domestic demand was weak.
Analysts noted that the new Government of Japan has just power for less than three months, in order to obtain a higher rate of public support to the Democratic Party-led coalition Government urgently needed in the Senate in July next year before an election to avoid economic depression, recession. Prior to this, Japan has just barely out of 60 years is the most severe recession. As of September, Japan's economy is the second consecutive quarter of growth, from World War II after the most severe recession. But analysts warned that if the yen continued strong or further deterioration in the domestic deflation situation, Japan's economic downturn could once again.
Japan Government had originally intended to last Friday announcing new stimulus plan, but because of the coalition Government in stimulating case scale internal disagreements, published time forced to put off until Tuesday.
The latest stimulus plan size, than the Democratic Party last week to United the ruling social democratic party and the people's new party proposed 7.1 trillion yen. Analysts said the Democratic Party is obviously to nationals of the new party's request to expand the scale of expenditure made concessions.
Authorities also pointed out that, if the credit guarantees, etc. do not demand the immediate payment of measures included in the latest spending plan scale will reach 24.4 trillion yen.
The plan also Hatoyama since the Government took office in September of the first comprehensive stimulus plan. Prior to this, Japan has announced a number of exciting projects. Statistics show that since September 2008, the Government of Japan has introduced the fourth round of economic stimulus plan, the total size of more than 29 trillion yen (3260 billion). In contrast, China and the United States were launched 5860 billion and $ stimulus plan 7870.
Market not
Japan government commitment to stimulate the economy is determined very firm. Prior to this, the Government had intimated to expand fiscal stimulus, and pressured to central banks, which increased the size of the quantitative easing policy to stimulate the economy and respond to possible deflation.
Affected by poor domestic economic situation as a result, Japan's stock market since the month of September has been running since losing other major markets. However, the Government has recently hit the lifeboat combination of boxing, rigu since late November, once since the last bounce appears even up to six days.
However, in the stimulus was announced on Tuesday, the market response is not overwhelming. The stock market but to closing down, thus putting an end to the rising of the continuously for six days.
For Japan's new stimulation, Morgan Stanley Asia President Roche yesterday that 7.2 trillion yen economic stimulus package "insignificant". He said that Japan policy needs more radical, Hatoyama government economic opening is not perfect.
Japan Government Wednesday will release third quarter economic growth revised data, market generally expected, the latest data is less than the initial value. Local economists generally agree that the Government has launched a new stimulus plan is "necessary and not adequate" measures, without that measure, the economy is likely to be in recession.
Yen exchange rate has recently also reproduce the appreciation of the evidence. The US dollar against the yen yesterday the European plate fell more than 1%, to 88.50 below. At the end of November, the US dollar against the Yen once fell to 14-year high of 84.83, but thereafter all the way back to near 90.
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