The Japanese government has approved a fresh 10.3 trillion yen ($116bn; £72bn) stimulus package in an attempt to spur a revival in its economy.
The package will include infrastructure spending, as well as incentives for businesses to boost investment.
Tokyo estimates that the stimulus will boost Japan’s economy by 2% and create 600,000 jobs.
Japan’s economy has been hurt by a dip in exports amid slowing global demand and subdued domestic consumption.
The world’s third-largest economy is currently in a recession, having contracted for two quarters in a row.
“Unfortunately, the previous administration failed to work out how to boost growth and expand the economic pie,” Prime Minister Shinzo Abe said.
“It is vital that we have an economic strategy that can create jobs and raise incomes to sustain growth.”
Included in the spending package are plans to rebuild areas devastated by the earthquake and tsunami of 2011, support for regional economies, and more investment in education and social security.
Weaker currency
Mr Abe, who took office in December, has promised to take aggressive measures to help put the economy back on a growth track.
Among those has been a pledge to take measures to weaken the yen.
A weaker Japanese currency bodes well for the country’s exporters as it makes their goods less expensive to foreign buyers and also helps boost their profits when they repatriate their foreign earnings back home.
The yen has weakened nearly 12% against the US dollar since November last year on hopes of such moves. It was trading close to 88.97 yen against the US dollar in Asian trade on Friday.
The government said that it would continue to keep a watch on the currency’s movements and “respond as appropriate”.
Japanese shares rose on the news of the stimulus with the Nikkei 225 index gaining 1.4%.
The Japanese government also hopes the latest stimulus spending will help to tackle deflation. Japan has been fighting deflation, or falling prices, for many years. It has been a big hurdle in policymakers’ attempts to boost domestic demand because consumers tend to put off purchases in the hope of a better deal in the future.
