Japan’s government approved a $490B spending package to support recovery from the Covid-19 pandemic after recent economic challenges. Nikkei 225 up +0.50%, JPY USD up +0.34%
- The size of the spending package was close to double what analysts were anticipating earlier this month and amounted to nearly 10% of Japan’s gross domestic product.
- The package contrasts with the U.S., where issues about government spending and a potential rise in inflation have come to bear recently.
- The scale of President Biden’s social spending package was reduced to $2 trillion after criticism focusing on the rising national debt, and it incorporates tax increases.
- The program by Japan’s Prime Minister Fumio Kishida, who took office in October, does not incorporate huge tax increases and seeks to reignite a sluggish recovery from the pandemic.
- Japan’s GDP contracted at an annual rate of 3% in the July-September quarter, the second contraction in the last three quarters.