JN Daily | Gov’t Considering Addt’l Economic Stimulus

Good news on the proposed ‘stimulus’ even in the face of 200% type debt to GDP ratios.

Someone over there must get it?

They obviously don’t like the way the yen is going, which calls for deficit spending to reverse it.

(Budget deficits are like bumper crops, which put downward pressure on the price of the crop. Budget surpluses are like crop failures which do the reverse)

The off balance sheet way to deficit spend to weaken the yen is to buy fx, as they used to do, and, from the charts on their US Tsy holdings, they may currently be quietly doing just that.

The other way is to cut taxes to spur private sector demand, or increase govt spending to provide more public goods.

The exporters like the latter even though it does add to private sector demand some.

Japan Headlines,

Govt To Mull Extra Stimulus: Arai

Kan Says Govt Considering Additional Economic Stimulus

Inventory, Capital Spending Fall Short Of Economist Estimates

Forex: Dollar Remains in Lower Y85 Range in Tokyo on Weak US Data

Stocks: Nikkei Hits New 2010 Closing Low;Firmer Yen Trips Tech Shares

Bonds: JGB Yields At Multi-Year Lows On Views BOJ May Ease Policy

Govt To Mull Extra Stimulus: Arai

TOKYO (NQN)–Minister of Economy and Fiscal Policy Satoshi Arai said Tuesday the government will start discussing extra stimulus measures later this week.

“From around Friday, we’ll begin discussions on whether to implement (an additional pump-priming package),” Arai said in a speech at a Tokyo hotel that afternoon.

As for the need to compile a supplementary fiscal 2010 budget to finance the extra measures, “Prime Minister Naoto Kan will start hearing from ministries and agencies involved from Friday,” the minister said.

Kan Says Govt Considering Additional Economic Stimulus

TOKYO (Nikkei)–Prime Minister Naoto Kan said Monday that the government may offer another round of stimulus measures in a bid to underpin the economy.

On Monday, Kan instructed Minister of Economy and Fiscal Policy Satoshi Arai, Minister of Finance Yoshihiko Noda and Minister of Economy, Trade and Industry Masayuki Naoshima to examine the current economic conditions and report back with specific proposals.

Japan’s preliminary real gross domestic product showed a tepid 0.4% growth for the April-June quarter, while a strong yen and weak stocks threaten to derail the economic turnaround. “We need to closely monitor developments, along with currency conditions,” Kan told reporters at his official residence.

The stimulus steps could include extending such consumer spending incentives as the eco-point program for energy-saving electronics, which is set to expire at the end of December. Programs to support job-hunting graduates and measures to aid small and midsize businesses beleaguered by a strong yen are also believed to be in the works.

The government is expected to have around 900 billion yen in leftover funds in the fiscal 2010 budget originally earmarked for the economic crisis and regional revitalization. And an additional 800 billion yen of surplus money from the fiscal 2009 budget gives it a combined 1.7 trillion yen to fund additional stimulus.

But government officials are reluctant to increase bond issuances, citing concerns about the nation’s deteriorating finances.

(The Nikkei Aug. 17 morning edition)