Japan rolls out new $10.7b stimulus package

Stimulus aimed to counter possible Q4 recession.

"Japanese government today approved a stimulus package worth 880.3 billion yen (USD$10.7 billion) to support growth given prospects that the economy will fall into recession in Q4. The package follows a previous stimulus package on October 26th worth 0.1% of GDP, and is earmarked for health care, agriculture and public works projects, and will be funded by the fiscal reserve fund, without incurring any new debt issuance. It is expected to add 0.2% to Japan's growth and create about 80,000 jobs over the next 12 months, according to Japan’s Cabinet," said BBVA in its Asia Daily Flash report.

"Given the limited size of the stimulus, we forecast the economy will decelerate to about 1.2% growth in 2013 from about 2% this year," BBVA added.

"Separately, there was a batch of data released today, including better-than-expected industrial production, which expanded by 1.8% m/m s.a. in October (consensus: -2% m/m s.a.) from -4.1% m/m s.a. in September, due to a 14.7% (m/m s.a.) surge in electronic parts and devices production, which may prove short lived. October inflation and unemployment data were also released – both were in line with consensus (CPI: -0.4% y/y; unemployment: 4.2%)," it noted.