Friday, Japanese Prime Minister, Taro Aso ordered ruling parties to craft additional stimulus measures that cover several fiscal years to combat recession in the second largest economy. Aso will seek ideas from economists and industry leaders next week.
The Mainichi newspaper reported that Japanese third stimulus plan might worth 20 trillion yen. The new package is expected to support public work and address rising unemployment.
Finance Minister Kaoru Yosano said that Aso would possibly discuss fresh stimulus in G20 meeting in London next month.
The lower house of parliament had passed a record 88.5 trillion yen fiscal budget on February 27.
In second stimulus package worth 23 trillion yen or $255 billion announced in December, 10 trillion yen was set aside for tax cuts for homeowners and public financing. The remaining 13 trillion yen was appropriated to boost financial markets.
In October, the government had unveiled 26.9 trillion yen or $300 billion worth stimulus measures. The parliament had passed a 1.81 trillion yen supplementary budget to fund the first economic package on October 16.
The Japanese economy is in recession for the first time since the final three quarters of 2001. Gross domestic product contracted 3.2% in the fourth quarter of 2008, which was the largest fall in GDP since the first quarter of 1974.
Elsewhere, a survey from the Economic and Social Research Institute showed that Japanese household consumer confidence improved to 26.7 in February from 26.4 recorded in the prior month. The indicator stood above the expected reading of 26.5.
The survey was conducted on February 15 covering 6,720 households.
Among the sub-indices, the overall livelihood index rose to 29.4 from 29.2 and the gauge for employment climbed to 14.9 from 14.2. Willingness to buy durable goods stood at 31.4, up from 30.6 in the prior month. On the other hand, the indicator measuring income growth dropped to 31.1 from 31.4.
The Ministry of Economy, Trade and Industry revised down Japanese industrial production for January. Production was down 10.2% in January from the previous month, revised from a 10% fall estimated initially. It was the first-ever double-digit decline in Japan's month-on-month production data. Year-on-year, decline in production was 31%.
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