Japan announces new Covid-19 stimulus for economy

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Japan's Prime Minister Yoshihide Suga has announced a fresh round of stimulus for the Japanese economy.

The 73.6tr yen ($708bn; £530bn) package is expected to include subsidies for green investment and spending on digitalisation.

The additional spending is aimed at pulling the country out of its coronavirus-induced economic slump.

Japan's economy has started to rebound in the third quarter after a dismal second quarter.

But revised data released Tuesday shows that the Japanese economy suffered its worst post-war contraction in the second quarter, shrinking by 8.2%.

Although the economy grew by 5.3% in the third quarter, many analysts expect Japan's recovery to be muted due to a third wave of covid-19 cases.

About $384bn of the stimulus package will come in the form of direct spending.

The package will include extensions of subsidy programs aimed at promoting domestic travel and spurring consumption.

It will also include a $19.2bn fund to promote carbon neutrality by 2050, $9.6bn to accelerate digital transformation and $14.4bn in subsidies to support restaurants hurt by shortened trading hours during the pandemic.

Media caption,
Tokyo's famous Kabuki-za Theatre has been closed for the last five months

"We have compiled these measures to maintain employment, sustain business and restore the economy and open a way to achieve new growth in green and digital areas, so as to protect people's lives and livelihoods," Mr Suga told a party meeting.

Mr Suga's cabinet is expected to endorse the stimulus package later on Tuesday.

It will bring the combined value of coronavirus-related stimulus to about $3tr.

Earlier this year, Japan unveiled two stimulus packages worth a combined $2.2tn, including cash payments to households and small business loans.