Japan coalition party wants Y11 trn in fresh stimulus

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TOKYO, March 24 (BestGrowthStock) – Japan’s People’s New Party (PNP),
a tiny coalition partner in the Democratic Party-led government,
said on Wednesday it wanted 11 trillion yen ($122 billion) in
fresh stimulus to boost the economy before an election expected
in July.

The call for more spending is unlikely to be met as Prime
Minister Yukio Hatoyama and other Democratic Party lawmakers have
rejected a stimulus package.

The government could face more pressure to spend big as
slumping approval harms its chances in the upcoming election. But
a large debt burden and the threat of credit ratings downgrades
suggest the government won’t rush to spend more for fear of
worsening the country’s finances and increasing its borrowing
costs.

The PNP’s extra budget would allocate 1.2 trillion yen for
welfare spending, 1.8 trillion yen to promote job creation and 3
trillion yen for public works, the party said in a statement.

The party, led by Banking Minister Shizuka Kamei, said it
would fund the stimulus package by selling 2.8 trillion yen in
bonds earmarked for public works, selling 2.5 trillion yen in
zero-coupon bonds that are not subject to tax, and drawing down
reserves in the special account managing foreign exchange
reserves.

Kamei made several calls last year for big spending but was
unsuccessful.

Parliament is expected later on Wednesday to pass a record
92.3 trillion yen budget for the fiscal year starting on April 1
with a record 44.3 trillion yen in new bond issuance.

Japan’s outstanding debts are almost 200 percent of its gross
domestic product, making it the most indebted country among
industrialised nations. The government plans to release a fiscal
discipline target in June.
Investment Research

(Reporting by Stanley White; Editing by Chris Gallagher)

Japan coalition party wants Y11 trn in fresh stimulus