The government in Tokyo has decided to spur a nascent economic upswing with additional spending on infrastructure, health and agriculture. The package comes just ahead of an election, raising accusations of vote buying.
The extra spending amounted to 880 billion yen (8.2 billion euros, $10.7 billion) and was expected to hike Japan's gross domestic product (GDP) by 0.2 percent, the government of Prime Minister Yoshihiko Noda said Friday.
The second stimulus package in just over a month would primarily cover reconstruction costs in Japanese regions hit by last year's earthquake and tsunami, the Cabinet Office said.
In addition, 132 billion yen were earmarked for childcare centers and facilities for physically disabled people, while 110 billion yen would be spent on measures boosting job creation. Furthermore, Japan's small and medium-sized companies would receive 95.1 billion yen to support their businesses.
Prime Minister Noda said he hoped the package would create 80,000 new jobs, thus lowering the country's jobless rate of 4.2 percent, which is considered high by Japanese standards.
Noda's Democratic Party is facing defeat by the opposition Liberal Democratic Party in an election scheduled for December 16. Therefore, the fiscal stimulus is likely to cause accusations of vote-buying from the opposition.
Economists consider the extra spending as superfluous in view of recent gains in factory output and household spending, suggesting an improving economic outlook.
uhe/dr (AFP, dpa)